Your Chapter 7 bankruptcy trustee will likely check your bank accounts at least once during the process of overseeing your filing. They have a right to perform a full audit of your accounts or check them any time it is necessary. However, it is rare for them to keep close tabs on every account.
In most cases, your bank account trustee will generally look at your account balance on the filing date of your petition to ensure it matches the information submitted. This is a normal part of administering a Chapter 7 case in North Carolina.
The Trustee Will Likely Look at Your Account to Verify the Petition Is Correct
Even when an exemption covers the cash in your checking account, the trustee may want to take a closer look at your banking history or current use. Doing so is allowable and could involve a general overview or an in-depth review of your recent activity.
It is crucial that you know and report the following:
- What is in your bank account
- How much you are depositing, such as from direct deposits
- How many active automatic payments come out
- If you owe any debts (such as loans) to the banking institution
- That your account may be frozen
If they freeze your account, you may be able to speak with your bankruptcy lawyer or the trustee to gain access to your money. However, you should have a backup plan in place in case this takes a few days.
So what happens to your bank account when you file Chapter 7?
For the most part, nothing will change, but you’ll want to be sure you disclose all of them to your creditors. While your Chapter 7 trustee may not have the time or the need to watch your bank accounts closely, they will if they believe there is suspicious activity.
You should always be truthful to the trustee and in all your paperwork. If you have concerns or are unsure how to complete the petition accurately, you can contact a bankruptcy attorney for help.
If the trustee believes you are hiding income, assets, or additional accounts, they will take steps to uncover them. Violating federal bankruptcy law could have significant consequences. Specifically, committing perjury by lying to your trustee or on your petition calls for severe penalties under 18 U.S.C. § 152(3), including:
- Prison time
- Large fines
- The loss of your bankruptcy discharge
- Restitution to those impacted
Personal Injury Lawyer Near Me 828.286.3866
What If They Audit My Chapter 7 Bankruptcy Case?
Federal law instructs bankruptcy trustees to audit bankruptcy filings and their supporting documents:
- Randomly; and
- If there is a reason to believe the information may not be accurate or true
If this happens to you, you may want to reach out and enlist the help of a bankruptcy attorney. Our team can help you provide any additional documents, represent you to the trustee and others, and protect your rights.
It is important to remember that a case audit does not mean you did anything wrong. However, it is essential to cooperate and provide any paperwork or information requested during this process. The trustee will ensure your bankruptcy schedules match your banking records and other documents before allowing your case to move forward. This should not be a difficult or stressful process, assuming you provided the correct information.
How an Attorney Can Help with Your Chapter 7 Bankruptcy
A Morganton bankruptcy lawyer from our firm can represent your best interests, helping you make the right decisions and provide the necessary documentation to get your debts discharged. They can also take steps such as:
- Documenting any non-exempt assets
- Helping you retain your car, home, or other assets
- Determining which debts qualify for discharge
- Representing you to the trustee, creditors, and court
- Answering questions about the bankruptcy process or your specific case
- Addressing any major concerns you have as the case moves forward
- Offering advice on investments and purchases before, during, and after bankruptcy
You can learn more about how a bankruptcy lawyer can help you with your petition by connecting with our law firm today. We will explain our services, fee structures, and more. Our firm represents individuals and families filing Chapter 7 or 13.
We also handle Chapter 11 reorganization and Chapter 12 for family farmers. We can help you determine which, if any, of these options is best for you and your family.
Reach Out to Our Team Today in North or South Carolina
At Farmer & Morris Law, PLLC, our team is here for you during this challenging and stressful time. Even with resources from the U.S. Courts, U.S. bankruptcy law is complex to navigate alone. We leverage our knowledge in this area of law to help our clients discharge their unbearable debts.
We have multiple locations throughout North Carolina, with our main office located in Rutherfordton and an additional office in Spartanburg, SC. You can learn more about our team and the services we provide now by dialing (828) 286-3866. We have someone who can answer your questions today.
Farmer and Morris Law, PLLC, is dedicated to providing excellence in legal representation.
Meet Our Lawyer Joshua B. Farmer
Get Legal Advice Now »
Bankruptcy FAQ:
How Much Do You Have to Be In Debt to File Chapter 7?
You do not have to be in a specific amount of debt to file Chapter 7 bankruptcy. Your income might play a role in your ability to file for Chapter 7 bankruptcy protection, and you might be required to
What Happens If I Declare Bankruptcy?
When you declarebankruptcy, you willfile a petitionin federal court. Once your petition for bankruptcy is filed, your creditors will be informed and must stop pursuing any debt you owe. The
What Is the Difference Between Chapter 13 and Chapter 7 Bankruptcy?
One key difference between Chapter 13 and Chapter 7 bankruptcy is that Chapter 7 allows people to completely eliminate their unsecured debt after a specific period. In contrast, Chapter 13 allows
What Is the Downside of Filing For Bankruptcy?
Filing for bankruptcy protection is considered a statement on your ability to repay your debt to your creditors. The fact that you sought and received bankruptcy protection will remain on your credit
What Will I Lose If I File Bankruptcy?
Most people who file bankruptcy are able to keep all of their assets. Filing for bankruptcy may seem like an overwhelming experience. However, a lawyer from our firm can help you through the process.
What Is the Process of Filing Bankruptcy?
The process of filing bankruptcy begins with deciding which type of bankruptcy is right for you. You will then need to compile important financial documents, submit a petition to your local bankruptcy