Trustees Access to Bank Account

[Atlanta7]

As soon as debtor files for a chapter-7 bankruptcy, all assets of debtor become case trustees assets. Does that mean the trustee gets direct access to debtors bank account from the date the case is filed till discharge is granted? How does trustee know how much money is coming in and leaving that account after the case is already been filed ( unless trustee asks debtor to submit banks statements on ongoing basis) ?

[justbroke]

I think that's an over-simplistic view of what happens. The current assets become property of the bankruptcy estate, subject to exemptions. The Trustee does not have the power to view your accounts, without maybe a subpoena. That's why they ask you for 90 days of bank statements, and usually ask for an updated statement (or statements) at the 341 meeting.

The panel trustee knows knows nothing other than the disclosure through the 90-days of bank statements. If the panel trustee needs to dig deeper to look at "fraudulent" transfers then the trustee can seek additional statements by asking the debtor. The term "fraudulent" used here is a term of art and is not (criminal) fraud as we normally think.

The (Chapter 7) panel trustee would not ask for statements "on ongoing basis" since the bankruptcy estate is created on the day that you filed. Anything you receive after that date is not property of the bankruptcy estate except in some very very limited circumstances (e.g., inheritance by bequest or bequeath, and things related to property settlements in a divorce... all with a limited window).

Unless the (Chapter 7) panel trustee is taking over the operation of debtor's business (or businesses), they would not be entitled to "ongoing" bank statements. The (Chapter 7) bankruptcy estate is created on the day filed. That's the estate.

At least that's my understanding.