Trustee Blog

Trustee Frealy asks for bank statements

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This week I appeared in front of Chapter 7 Bankruptcy Trustee Todd Frealy on his calendar for meetings of creditors. Along with his typical questions, he has started asking the debtors for copies of the bank statements they have. The bank statements are to show the balance in their accounts on the day of the filing. This balance should comport with the balance listed in schedule “B” of the schedules and Schedule “C’ of the exemptions.

 

This may prove costly to a debtor that does not schedule the full amount of what is in his bank account at the time of filing. If this amount is great, the Trustee may make a claim against the amount as “unscheduled” and also “unexempt”. This may not be a problem in most times of the year, but now debtors are receiving tax refunds and large amounts of money could be in those bank accounts.

Practice Pointer: Check with your clients to see how much money is in their bank accounts at the time of filing. Trustee Todd Frealy will ask for proof of that amount by bank statements. Other trustees may ask for this as well, so go over this potential issue with your clients.

 Practice Pointer #2: Find out about those tax refunds. Did the client receive the tax refund and what did he do with it? This is an asset of the bankruptcy estate and should be dealt with at the initial intake of the case.

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