Are Bank Records Checked in Bankruptcy?

By Mary Jane Freeman

When you file for bankruptcy, the bankruptcy court will want to get an idea of your overall financial standing and circumstances. To do this, the court will look into your assets and liabilities, current monthly income and average monthly expenditures. To ensure the data it collects about you is accurate, you must provide the court with financial documentation, including bank records.

Types of Bankruptcy

Individuals typically file for either Chapter 7 or Chapter 13 bankruptcy. Also known as liquidation, Chapter 7 requires a debtor to give up all nonexempt assets to a bankruptcy trustee who then sells those assets, using the proceeds to pay off as many of the debtor's creditors as possible. In contrast, debtors who file for Chapter 13 bankruptcy don't give up anything. Instead, they enter into a repayment plan that lasts three to five years, paying as many creditors as possible. Any debts that remain unpaid at the end of liquidation or repayment plan are discharged and the debtor is no longer responsible for them.

Financial Documentation

Regardless of the type of bankruptcy filed, the debtor must submit certain documents along with the bankruptcy petition. These include the following: a statement of financial affairs; schedules of assets, liabilities, income and expenditures; contracts; and unexpired leases and copies of tax returns. As part of the data collection process, debtors must provide the bankruptcy trustee with copies of all financial and bank account statements, usually for the past 60 days, or longer depending on the individual court's procedure. This means a debtor must turn over statements for checking, savings, money market, and retirement accounts, stocks and bond statements, credit card statements, and the like. Debtors are sometimes also required to provide these statements again at the Meeting of Creditors, or 341 meeting, held a few weeks after the bankruptcy filing. The financial documentation must reflect the balances held in each account on the date of the bankruptcy filing.

Get a free, confidential bankruptcy evaluation. Learn More
Get a free, confidential bankruptcy evaluation. Learn More
Can the Trustee Freeze My Bank Account During a Bankruptcy?


Related articles

What Does It Mean if a Bankruptcy Is Lifted?

When an individual debtor files for Chapter 7 or Chapter 13 bankruptcy, creditors must immediately stop their collection efforts. Creditors sometimes may attempt to get around this ban by petitioning the bankruptcy court to "lift" the stay. A bankruptcy lift allows the creditor to continue collection activity, such as garnishing wages or foreclosing on a home, while the bankruptcy case is in progress.

Can You Include Returned Checks in Chapter 7?

When a debtor files for Chapter 7 bankruptcy, he must inform the court of all of his liabilities, including returned checks. Returned checks represent the debtor's unpaid debts. As such, they are dischargeable in bankruptcy, unless the creditor can prove fraud on the debtor's part.

What Happens at a Trustee Meeting?

When a debtor files for bankruptcy, he is on his way to a fresh financial start, but there are multiple steps to each bankruptcy case, including a mandatory meeting with a court-appointed bankruptcy trustee. This meeting, often called a creditor's meeting or 341 meeting, lets the debtor, trustee and creditors discuss the details of the bankruptcy case.


Related articles

How to File an Objection in a Bankruptcy Case

Bankruptcy is a legal process intended to give debtors a fresh financial start. When an individual files bankruptcy, ...

What Happens After a Trustee Bankruptcy Meeting?

A trustee bankruptcy meeting is a normal part of a Chapter 7 or Chapter 13 bankruptcy process. Some debtors get nervous ...

What Is Open Bankruptcy?

A bankruptcy case that is currently underway is sometimes referred to as an open bankruptcy. In other words, an open ...

How to See If a Bankruptcy Has Been Discharged

When a person applies for a new loan or refinancing after bankruptcy, it is common for some lenders to want proof of ...

Browse by category
Ready to Begin? GET STARTED