General BK Question re Bank Statements

[sje123]

Do you have to explain all your expenditures on your bank statements when filing for bankruptcy? Is it best to close your accounts and shut down all your auto payments before hand?

[Methuss]

You may be required to explain any large cash withdrawls or transfers.

You should discontinue any automatic payments for unsecured debt completely. Automatic payments for secured debts should be discontinued ONLY if you intend to surrender the secured property. Any secured property (which is not exempt) that you intend to retain should be kept current on payments.

Bank accounts are a gray area. Getting a bank account after bankruptcy can be a problem. So you should not close your accounts without good reason. Some good reasons to close accounts include: If you bank with Wells Fargo - They freeze cash accounts automatically if they find you filed BK; If you have a debt (OD account, credit card, etc) with the bank or credit union - they can sieze cash accounts under "right of offset" regardless of your exemptions in BK; if you have automatic withdrawls and you believe the vendor will pull payments anyways regardless of bankruptcy notice.

[sje123]

Very helpful. Thank you.

No large withdrawals but one 1.5k "purchase" that may seem frivolous (football tickets) for someone on the verge of bankruptcy but were purchased for a lgroup and they typically make a profit on any they don't use. Every year it comes automatically out of this one person's account and it already has. Person is freaking out that it will look bad.