If You Intend on Filing Bankruptcy, Pay Attention to Your Account Balance

Filing for bankruptcy protection is a life-altering event. Like any other major change in life, planning ahead may help you experience a smooth process and ensure that you don’t end up in worse shape than you are now.

One concern for people who are considering filing bankruptcy is how much of your property you may keep. In addition to your home, car and other items of value, your bank accounts are also included in your bankruptcy estate.  You must use particular caution in handling your liquid property — cash and bank accounts — or you could lose them or even face fraud allegations.

Reporting accurate balances

On your bankruptcy petition, you must list the exact balance for each of your bank accounts as of the date of filing. You can retrieve this information from your online account or from a bank teller.  You should note that your actual balance does not include any checks you have written but have not cleared or other pending transactions.

Reducing balances

In some cases, such as most Chapter 13 cases, your balance will not make a difference.  On the contrary, in Chapter 7 cases it usually serves you best to have the lowest possible bank balance at the time you file your petition. You can lower your balance, if necessary, by paying on your normal monthly bills and expenses.  These will include payments on your mortgage, car utilities and other expenses, like groceries.  Bankruptcy exemptions for Pennsylvania allow you to keep a specific amount of property.  If you use your exemption on your bank balances, then you may have fewer exemptions left for other property.

Don’t try to lower your balance by withdrawing large amounts from your banking account or transferring money to friends or family. Not only will you have to report these amounts as cash on hand, but you could face fraud charges.

Consult with Harold Shepley & Associates before you pay off any bills or try to reduce your account balances. Consultation is free, so all you have to lose is your debt.

By Harold Shepley | Published August 27, 2013 | Posted in Bankruptcy | Tagged bankruptcy attorney, filing for bankruptcy, Pennsylvania bankruptcy attorney | Leave a comment