Bank statements/spending pre-filing (California)

[beyond]

Hello. I'm trying to get my ducks in a row prior to filing, and I'm curious for how many months back pre-filing the trustee would want to see bank statements.

I admit that my money management skills this past year have been less than exemplary (spending my previously-paid-to-creditors funds on dining out, clothing, personal services, etc., although no major purchases). Now that I was approved for health insurance (the primary reason I'm filing Chapter 7 is because of my medical debt) and my hours cut from 40 to 35 hrs/wk, my disposable income has been reduced, and thus my spending is in line with IRS standards.

I just want to make sure that I'm documenting and staying within budget as per my draft Schedule J for as long of a period as necessary to not cause any issues with the trustee.

Many thanks!

[LadyInTheRed]

If the trustee wants any account statement, it will most likely be the statement that includes your filing date. Your attorney will probably request more statements, but that will vary by attorney.

The trustee would be looking for evidence that you are trying to hide assets or income, not for your spending habits. If irresponsible spending was a reason to object to a debtor's discharge, there would be a lot more objections to discharge! Your pre-filing spending does not have to be the same as your Schedule J budget. Unless the trustee has reason to believe you are being dishonest in your petition, he is very unlikely to match your bank statements to your Schedule J. I would say it won't happen, but I never say never. Even if the trustee did compare statements to Schedule J, having your expenses lower on Schedule J than what your previous spending has been certainly will not cause a problem.

In a Chap 7, the purpose of Schedule J is to make sure you can't afford to pay more to your unsecured creditors in a hypothectical Chap 13 than you would in a Chap 7, not to make sure that you stick to your budget.

ETA: Before I filed, I logged on to my checking account and all of my credit card accounts and downloaded all the past statements that were available. There they sit on my hard drive in case I ever need them. So far, I haven't needed any but one checking account statement to give my attorney. But, I recommend downloading what you can so it is available if needed. Trustees can ask for any financial information they decide is necessary. But, from all the stories I've read on this board in the last couple of years, in most cases they don't ask for rmuch.

[luckstyl]

Neither the trustee nor my attorney ever asked for or mentioned any bank statements of mine. After reading this forum I was expecting to be required to bring them to the 341 meeting, but my attorney was incredulous when I asked him about that. He basically laughed at the suggestion and said that trustees here don't have time for that.

[LadyInTheRed]

Neither the trustee nor my attorney ever asked for or mentioned any bank statements of mine. After reading this forum I was expecting to be required to bring them to the 341 meeting, but my attorney was incredulous when I asked him about that. He basically laughed at the suggestion and said that trustees here don't have time for that.

I think people often read about what people had to provide to their attorneys and confuse that with what is provided to the trustee. In my opinion, an attorney should at least look at a debtor's most recent bank statement and arguably should go back a few months to a year. That's the best way to make sure no surpises come up during the BK because a client forgot about something relevant or didn't think it was important. A thourough questionnaire could serve the same purpose, but it still may not jog a client's poor or selective memory.

[jst4f]

We did a major download of information to our attorney so he could get a clear picture of our situation and help us plan our BK7. What went to the trustee was last two paystubs and one year of tax forms. No bank statements. I suspect the trustee can ask for a lot of additional information but they won't unless they smell non-exempt assets.

[btbeme]

I suspect the trustee can ask for a lot of additional information but they won't unless they smell non-exempt assets.

Agreed. A Trustee will ask for photos and an inventory of your sock drawer if they want to.

Bank statements are a way to analyze what your spending patters are in the months and days leading to your filing - not to see if you are dining out, but more to see if you are tucking money under the mattress or have made non-exempt purchases (or have a pattern of buying stuff they could grab and sell). It is always best to be able to explain any large purchases over $300 in the last 6 months, and having receipts is a big help - but don't sweat it unless you are asked.

In my district, 3-6 months of statements is pretty typical. Other districts such as yours might not require them unless something smells funny.

[angles]

We did a major download of information to our attorney so he could get a clear picture of our situation and help us plan our BK7. What went to the trustee was last two paystubs and one year of tax forms. No bank statements. I suspect the trustee can ask for a lot of additional information but they won't unless they smell non-exempt assets.

This mirrors our experience in CA as well.