Unexplained Bank Deposits

[SuzieBK]

In going through all of our bank statements for the past six months and correlating them to my husband's direct deposits and checks received by my business, I've realized that there are some deposits where we have no clue where the money came from. There six in total, three in December, one in January, one in February, and one in March. All of the amounts are different, they range from $100 to $475, and the total unexplained amount is $1,440. I'm still trying to figure out where they came from, but in the meantime, should I be stressing about this or can they just be explained as family gifts or something similar?

[LuciluS]

I gather you must own your own business? I think the $1,440 maybe questioned as I'm sure you will have to provide more bank statements because of owning your own business.

Do you invoice or bill your clients? If so, go back through your billings. Or might you have a calendar listing what/what you worked. Looking at the above two things might help trigger your memory.

No, you don't want to show the big deposit as a gift from family members as then it could be questionable to the Trustee. Maybe someone will come along and have a better answer for you.

I feel for ya'll who own your own business and going through bankruptcy as what I've read, you have to supply so so much more information.

Good Luck!

Luci

[Cheeseater]

I've got my own small business and this same problem is popping up with me on a larger scale. Why would it be problematic to say that they were gifts from my family for birthdays and the holidays coincide with many deposits. I can see they would want to know where the money is from but what if they were gifts from family members? Would he want the canceled checks? My largest fear with this whole process is the microscope my business will come under, I've never been too strong on the bookkeeping side. I'm hoping to file in July but the more I read the more I worry. Let me know how you resolve it and best of luck. Just for info I have about 8 of them and they amount to $3000,$1000,$975,$1000,$725,$4000,$4000, $500.

[doingpoorly]

If it is really driving you crazy just ask the bank to research the deposits and they can give you a photocopy of the deposit slip and checks that were deposited. If it was cash then it will be of no help so hopefully you deposited checks. Of course, they will charge you but it shouldn't be to much. The last time I did that it cost about $5-$7 per transaction. If it brings you peace of mind then it is worth it.

[GeG_Lost]

I had $14,000 listed in gifts from my mother over the last six months of last year, plus a few hundred this year and it wasnt a problem, but we were under median by a good amount. The gifts would have brought us to or over median if they doubled the amount for the year, but I am not sure why the trustee counted it the way he did. My lawyer wasn't at all worried about it, so I would ask your attorney if you have one. My mom had been depositing money and I had been using it to keep us afloat... paying bills, buying the kids school clothes, and things like that. I was terrified about it because of everything I read here. I was really surprised when it didn't even get mentioned at the 341. I suppose if he looked at my bank statements he could probably see that a lot went to car repairs and things of that nature. It wasn't like there was even the appearance that we bought anything extravagent with the money, so maybe that is why it wasn't an issue.

[JoeBankrupt33]

I was selected for audit, and they asked only for a description of any deposit over $500. So, given the individual amounts of the deposits, I wouldn't be too concerned.

In mine, I had gifts, health account reimbursements, and some totally unknown deposits up to about $200 and nobody ever asked about any of them.

[SuzieBK]

Thanks everyone! I went back through everything again and found all but two of the checks. Given that they were deposited on 12/26 and 12/30 and were for $245 and $125, they could easily be explained as family gifts.

I'm totally stressed right now as we're supposed to be filing in a week and I still feel like everything is still not in order. And, Cheeseater, I'm TERRIBLE about my bookkeeping. Because it's been a part-time business with almost no expenses, no inventory or any property owned by the business, and since I've never cleared more than $36K, I don't have anything more than an Excel spreadsheet tracking my hours and invoices. I haven't kept records on when I got checks, when they were deposited, etc, etc. This definitely has taught me a lesson.

[Cheeseater]

It sounds like you have a better handle on it than me. In six years my business has never had a net profit of over $5k. My expenses are extremely high and that is what worries me. We are over the median but will pass the means. I'm just very apprehensive after reading some of the items questioned by other filers. Keep us posted about your progress and best of luck.

[anuta]

I was also in the same boat. When we went into see the BK lawyer he said it was clear we wouldn't make it through a chapter 13 and to wait--due to many things, death, illness, we have had to wait to file a chapter 7. One thing the lawyer said to me was "get your books in order!" I went to a retired business woman in my community and told her everything--how we got into debt and that we were going to file BK. This woman helped me log all my invoices, expenses --everything into quickbooks. Taught me how to use Quickbooks, and amazingly, tracked down each deposit I made (sometimes I had combined many checks together) and I have to say I really have a different view of how my business works, where the losses are; where the profits are. Half way through my second year of keeping very good books--can't imagine going back to the old way. We plan to file BK in Aug--seems so far away, and, all too close.