If I file for bankruptcy will they check into my financial records?

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If I file for bankruptcy will they check into my financial records?

I have recently cashed some large checks and lost the money.

Asked on January 10, 2012 under Bankruptcy Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, the court or a trustee will check your financial records during bankruptcy.  In fact, you will be required to produce true and accurate copies of many records.  To qualify for bankruptcy, you have to demonstrate what you can or cannot pay towards your debt obligations.  Because of bankruptcy fraud, they will also look at your transactions in the few months immediately prior to your filing.  What they are looking for is evidence of fraudulent transfers.  For example, if you gave your mother $10,000.00 to "repay a debt," but didn't pay your autoloan for six months, a trustee is likely to call "foul" and accuse you of a fraudulent transfer to a relative.  The trustee can then go get the money back from your mother and use it to pay off your other creditors.  Many attorneys will give you a free assessment about how and when you should file.  If there are some issues with these lost checks, you may be better off waiting a couple of months before you file for bankruptcy.


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