Money Changes During Bankruptcy

: Chris Lee Law Firm

  Filed under: Bankruptcy Exemptions

When you file for bankruptcy your financial situation becomes closely examined. The court will need to know the ins and outs of all of your financial details. How much you owe creditors, your income level, how much you have in various accounts and the nature of your assets. So what happens if any of this information changes after you file?

Reporting Changes

In most cases, changes in your information will not have any significant effect on your case. Changes in income or funds can affect how much you may be required to pay creditors, but this is rarely enough to make an impact. The reason is that your debt resolution plan determined by the court is based on your level of income and non-exempt funds, like inheritance money. If you were to obtain a new job, have an increase in your salary or inherit money, you may be required to give a portion of the increase to creditors. Retirement or benefit funds are generally exempt from bankruptcy and changes to these accounts would have no effect.

Changes to your debts or assets could be more significant and are typically prohibited. The court suggests that all debts and assets be left as is during the bankruptcy process. Therefore, selling or giving away assets is prohibited and could even be viewed as fraud. Paying off or towards a debt is also not advised because these actions can interfere with the bankruptcy process and could lead to disqualification from eligibility.

It is important that you are open and honest with your Dallas bankruptcy attorney during your case. Provide all the information as requested and never attempt to hide anything. If any aspect of your income, debts, funds or assets changes while you are in an active bankruptcy case, report it to your attorney or the court right away.

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