How do trustees get their information on each debtor

[DimkinB]

Hi all.

Kind of a newbie question. I know I have to list all of the accounts when applying for bankruptcy which will be used by a trustee to see if there are any money available to pay the creditors. but what happens next? Does a trustee request banks to send him reports on those accounts to see the money movement? Or they already have access to private banking information once you file and see every transaction you made going back a certain time period?? How do they check you for possible fraud and so forth? The reason I am asking is that the only documents my lawyer said are required to file is 2008 and 2009 tax returns, 6 months worth of pay stubs, bills for every creditor I owe money to and deed if own real estate.

Thank you

[ccsjoe]

Trustees get their information from your filing docs and the tax returns. Some ask for bank statements, others don't. It really all depends on whether they see something that seems off. If your filing documents show a pretty straightforward case, they generally will not look deeper. Trustees do not have priviledged access to your bank accounts directly. Now, if the UST gets involved in your case, then they do have the authority to request information directly from financial institutions although generally they will ask you for it first. The UST will only get involved if they suspect abuse or fraud or if you are one of the unlucky 1 in 250 to get randomly audited.

[debee]

Minor point, but when I was at the US Trustee Program webpage I read that they only audit 1:1000 now. Thank goodness for budget cuts!

[tobee43]

Hi all.

Kind of a newbie question. I know I have to list all of the accounts when applying for bankruptcy which will be used by a trustee to see if there are any money available to pay the creditors. but what happens next? Does a trustee request banks to send him reports on those accounts to see the money movement? Or they already have access to private banking information once you file and see every transaction you made going back a certain time period?? How do they check you for possible fraud and so forth? The reason I am asking is that the only documents my lawyer said are required to file is 2008 and 2009 tax returns, 6 months worth of pay stubs, bills for every creditor I owe money to and deed if own real estate.

Thank you

what your atty is asking for is basically routine...that's what the courts generally require...however, they can ask for more depending on how you answered the questions on the petition submitted. i'm certain your atty pointed out anything they thought questionable and if nothing was mentioned it's usually because you didn't raise any red flags to be alarmed about.


deb...thank HEAVEN for small favors and those cut backs!

[BKlooker]

As i understand it, your main Trustee can't get additional info unless they first request it from you to submit. If you don't submit, they could request from certain creditors. If the UST gets involved, then yea i believe they have more "far-reaching" power to get documents, but that would mean that you triggered a red flag of some kind or a random audit.

In general, as long as you got a good lawyer, they should be doing a thorough job of looking over everything before filing and you two should have discussed any potential flags and submitted proof/backup work accordingly ahead of time. That is going to be your best defense again getting 20-questioned.