How carefully are your bank statements scrutinezed? (Income question)

[WorkingItOut]

First of all, I'm not trying to hide any income. I just have a question about what is considered income and how many things I'll have to "explain" on my bank statements.

I'm very close to the median income in my state and have been looking back over my bank statements for the last 6 months and realized I have a lot of strange little deposits - things like redepositing some of the money I had withdrawn previously so that a check wouldn't bounce, or deposits of money my mother gave me as payback for picking up some groceries for her. That sort of thing. These are not income, but I really have no proof that they are not income. Adding all of them up and I am over the median! Deduct them and I am back under.

Will my bank statements be scrutinized so closely that I will have to prove these deposits are not income? How would I do that?

ETA: Sorry for misspelling scrutinized in the title! LOL!

[laurannm]

I think this may depend on standard practice in your area, particularly on what the trustee/UST look for. Many people have had to provide bank statements, and some have been more scrutinized than others. Factor such as above/below median, amount of secured debt, overall feel of our case are all factors that play a part on how much scrutinizing your case gets.

Others (such as us) have not been asked to provide a single bank statement. According to our lawyer, this is pretty common in our area, unless you are flagged for audit.

[justbroke]

Yes, the Trustee and area determine many things. The Chapter under which you filed, also makes a determination of how much information they require and/or scrutinize.

[Cali]

I know I had to show bank statements to my attorney, but wasn't asked about them at my 341.

[Flamingo]

When you provide bank statements or other requested documents, you must assume they will be scrutinized. Once they have those documents in hand it's up to them how far they want to take it. Guessing will get you nowhere.

[magyar123]

Don't think that small deposits - way less than your payroll deposits will raise any red flags with most trustees

[Cali]

I like you. Are we related LOL

When you provide bank statements or other requested documents, you must assume they will be scrutinized. Once they have those documents in hand it's up to them how far they want to take it. Guessing will get you nowhere.

[Flamingo]

I like you. Are we related LOL

LOL! Cali it's just called common sense....

[WorkingItOut]

When you provide bank statements or other requested documents, you must assume they will be scrutinized. Once they have those documents in hand it's up to them how far they want to take it. Guessing will get you nowhere.

I understand that. I guess I'm looking for personal anecdotes on how others have dealt with the little deposits.

LOL! Cali it's just called common sense....

The bankruptcy process seems to involve a bit more than just "common sense". Some of us are new to this and are, frankly, terrified, and may ask questions that to seasoned veterans seem stupid. But I am just trying to get my ducks in a row and want to make sure I don't do something dumb that could be avoided if I just planned better.

[WorkingItOut]

Thank you everyone.

[Cali]

I don't think Flamingo was saying that the whole process of BK was common sense, but many things like this should be regardless of filing. If you have to prove income, show bank statements or some sort of financials, it will be looked at. Now to know how far they will go into looking at it, depends..no one would know that because each case is different.

[Flamingo]

I understand that. I guess I'm looking for personal anecdotes on how others have dealt with the little deposits.

The bankruptcy process seems to involve a bit more than just "common sense". Some of us are new to this and are, frankly, terrified, and may ask questions that to seasoned veterans seem stupid. But I am just trying to get my ducks in a row and want to make sure I don't do something dumb that could be avoided if I just planned better.

Please don't take what I am saying the wrong way or as being snide...any documentation provided in the legal world will be "scrutinized" - that is why it was requested...be prepared to explain anything listed on that documentation, from a deposit of $.02 to the $1,000 or more withdrawal. Don't assume anything. There is no reason to be terrified, just informed. No one is telling anyone they are stupid or emotional - handle providing documentation as you would providing information to anyone - be ready to explain your case/situation. Many times the documentation is asked for and never reviewed - what I am trying to get across is that you just don't know if that will happen so go over every detail in anything provided and be ready to explain. We were asked about many deposits/withdrawals/charges, small and large. We also had to provide a full explanationof any deposit over a certain amount and a full explanation of any withdrawal or check written over a certain amount. Don't assume they will not question anything else no matter what the amount is - be ready with an answer. The worst thing to do during banruptcy is to "assume" anything will or will not be looked at and/or questioned. That is where common sense falls in....if you are questioning it yourself, others can question the same thing. The more you look at something with common sense, the more you are protecting yourself.

Best of luck to you...

[WoodSprite]

I understand that. I guess I'm looking for personal anecdotes on how others have dealt with the little deposits.

The bankruptcy process seems to involve a bit more than just "common sense". Some of us are new to this and are, frankly, terrified, and may ask questions that to seasoned veterans seem stupid. But I am just trying to get my ducks in a row and want to make sure I don't do something dumb that could be avoided if I just planned better.

We do get it, WIO - that's why we all need this forum in addition to the Nolo books. There's a lot more going on than research; this here is THERAPY. This is about the scariest process most of us can imagine, and almost nobody has ever done it before.

I had a ton of little deposits; I was cashing checks for a music teacher friend with no bank account. Yeah, dumb, I know, but who does it hurt, right? And who EVER dreamed anyone would take an interest in my pathetic little checking account? And then there were the little sales on Amazon and Ebay, and dribs and drabs here and there. Totally insignificant sums of money, but they WERE deposits.

So let's see...how did I deal with the little deposits once I realized how that could look to a trustee? I'll tell you how: I worried about them. I lost a LOT of sleep over them. My brain, which is actually quite functional as a rule, calmly continued troubleshooting javascript and translating Middle French and balancing my checkbook by day, and then spinning spinning spinning uselessly all night over details over which I had no control.

The lesson I've learned is that your financial life on paper simply is what it is, and all you can do is be sure that IT is legal, justifiable, and documented. Keep good records - obsess over that, if you need to obsess over something (I sure did!).

I was incredibly lucky - nobody cared in the least, and I didn't need to explain myself. If I had needed to explain, though, I had the documentation to back it up, and the very worst thing anyone might have concluded (including a trustee) would have been that I wasn't managing my finances very well. I'm thinking this would have come as no surprise to anyone in a bankruptcy proceeding.

Nobody here, whatever they might say, ever really forgets what it's like to be in the throes of what you're going through right now. Every "stupid" question you bring here keeps you from making a "stupid" mistake that one of us has already made for you. Keep asking, and all the best to you. You'll get through it.

[BROKENN]

Oh woodsprite, perfectly said!
Therapy... Oh Yeah
Worry..... is there another emotion?
Forum saved my bacon on a few things....... You Betcha' !!!!

[Cali]

Motto for today: QTIP..Quick taking it personally.

Food for thought: Everything that has to do with your finances will be looked at closely, especially in the BK arena.