When you file for bankruptcy you need to provide the bankruptcy trustee with copies of your bank statements, typically six months. The bankruptcy trustee’s office staff will review your bank statements and look things such as wire transfers, large payments to creditors, and cash withdrawals. If they find any of the above mentioned items they will likely ask you numerous questions about the transaction in question.
Why do they look at cash withdrawals
If a bankruptcy looks at your bank statements and notices that for the past six months you have routinely withdrawn thousands of dollars from your bank account each month they are going to be concerned. A trustee will think that you are basically withdrawing the cash in your account and hiding it under your mattress or elsewhere, in an attempt to hide assets from the trustee or your creditors. If you did this and the bankruptcy trustee finds out then you can likely expect your bankruptcy case to be denied and potentially face a criminal referral.
Reasons for Cash Withdrawals
The majority of my clients don’t have access to credit cards any more so their purchases are made either with cash or a debt card and there are no issues to do so. However, if you have large withdrawals every month you need some sort of paper trail in receipts or purchases to show that you are not just hiding the money.
If you are withdrawing small amounts of money (pocket change) each month then you shouldn’t expect any issues, but if you are withdrawing large amounts of monies then you can expect the trustee to ask questions and have you provide documentation regarding the purchases.
To schedule a free consultation and to determine if bankruptcy is the right option for you please contact bankruptcy attorney Ofer Shmucher of Shmucher Law, PL at 954.309.5559 or 305.741.5553.