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Seniors - Be Accurate About Bank Account Balance When Filing A Bankruptcy

Seniors - Be Accurate About Bank Account Balance When Filing A Bankruptcy
December 30, 2022

When a Chapter 7 bankruptcy is filed by an elderly debtor, all of the debtor’s property in their “possession, custody, or control” is part of the bankruptcy estate. For all property of a senior-citizen debtor, which is not exempt from collection, the bankruptcy trustee may require turn-over the property to pay creditors. It is therefore extremely important to accurately identify and disclose all the debtor’s property to your attorney prior to filing a bankruptcy case.

One situation that can cause headaches in bankruptcy, especially among the elderly, is misrepresenting the actual balance in a checking account on the day the bankruptcy is filed. If the debtor is unable to exempt the cash balance in a bank account, the trustee may require turn-over of the funds even if they have already spent.

A delay in the filing of a debtor’s case can sometimes lead to checking account issues. For instance, the debtor believes that the case was filed the day before payday, when it was filed on the debtor’s
payday. The bankruptcy schedules report $100 in the bank account, when the amount is $1,000.

Negligence can also be a factor in bank account mishaps. One common mistake is reporting the ledger balance without checking the actual balance the bank has for the account. The United States Supreme Court held in the case of Barnhill v. Johnson, 503 U.S. 393 (1992), that the transfer of funds occurs when the bank honors a check. Therefore, if the bank balance is $1,000, and $500 is written in outstanding checks that have not been honored by the bank, the full $1,000 is the proper amount to be disclosed in the bankruptcy schedules. 

Good bookkeeping and communication with your senior citizen bankruptcy attorney can present the above problems. First obtain your actual bank balance, and account for any direct deposits, pay checks, and any outstanding checks. Always discuss your situation with your elder needs bankruptcy attorney.  Be careful about writing checks just prior to filing bankruptcy. Pre-filing financial transfers can cause additional issues in your bankruptcy. Sometimes it might be wise to delay your bankruptcy filing until checks clear the account, or a paycheck has been spent on necessities.

Your senior citizen bankruptcy attorney can help avoid surprises and problems in your bankruptcy but takes full disclose of asset and cooperation between you and your attorney. Inform your bankruptcy attorney when there are changes in your property, debts, income, or expenses after you have signed your bankruptcy petition and before it is filed.

If you are a senior in need of financial relief from your debts, bankruptcy may be your solution.  


At Elder Needs Law, PLLC, all we do is consumer asset protection, primarily for senior citizens in Florida.  We protect assets from the government, nursing homes, spouses, family members, and creditors.  Please consult with a bankruptcy professional that focuses their practice on the senior population.  You have more options than you might think, and some options have hidden costs and fees you want to avoid.  You owe it to your family to weigh all your options and to be fully informed with a plan of action in place.  Please contact Elder Needs Law, PLLC at 305-614-7379 or look us up on the web at for more information on how the asset protection attorneys at Elder Needs Law, PLLC can help you and your family.

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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