Question: What information do I need to divulge to go bankrupt? What if a small amount of my debt is recent debt? (Within the last 3 months). I’ve recently tried to spend money to make money to try get out of debt and it has not worked and I’m worried that to a trustee that will look like rampant spending.
Answer: When you declare bankruptcy all creditors are notified, and they are required to send the trustee a summary of all transactions for the past three months. If you bought a $10,000 big screen television the day before you filed for bankruptcy that will be a problem, since that’s considered fraud. However, if a month ago you put $50 worth of gas in your car, it will be much less of an issue.
One option is to simply make a payment to the creditor for the amount that you recently spent. If you bought $50 worth of gas with your credit card yesterday, make a payment today to them for $50. Since your balance then goes back to it’s previous level, it’s not an issue.
If the amounts are larger, you should consult a trustee before you file to determine what impact, if any, the transactions may have on your bankruptcy.