Bankruptcy Requirement:  Account Balances

The “Highest Available Balance: On the Day of Filing

Shortly after filing a Chapter 7 Bankruptcy, you’ll be asked by your lawyer to provide several additional documents to the Trustee pursuant to Bankruptcy Rule 4002, one of the bankruptcy requirements, prior to your 341 Meeting.  One of these documents is proof of the “highest available balance in the accounts on the day of filing” for each and every financial account that you have.  This includes checking accounts, savings accounts, and all other financial accounts you listed as an asset in Schedule B of your bankruptcy petition.  Providing the highest available balance on the day of filing may sometimes be easier said than done, here are a few pointers.

The General Rule:

“Highest Available Balance” is not always the same as “Closing Balance”

When considering if what you have provided to your attorney for the trustee is sufficient, the simplest of tests applies: Can the trustee decipher the “highest available balance on the day your case was filed” based on what you provided? Consider the following scenario:

Example

9:00 am:    Opening Balance of $1.00

Noon:         Deposit of $500.00

3:00 pm     Withdraw of $500.00

5:00 pm     Closing Balance of

                                    $1.00

What isn’t the “Highest Available Balance on The Day of Filing”:

1. 1. “Closing Balance”:  The closing balance in your account is not the same as the highest available balance on the date of filing.  Closing Balance is the amount in your account at the end of the day.  Using the scenario above, if you have $1 in the bank in the morning, then deposited $500 at noon, and take $500 out at 3:00 pm, the closing balance will be $1, while the highest available balance is $501.
   2. “Screen Shots” Highest available balance on the day of filing is not a screenshot off your computer taken at some point on the day we filed your bankruptcy petition.  This is obvious, but worth explaining in that a screenshot is a picture taken at one moment in time.  If you took that screenshot, using the above example at 4:00 pm, after the withdrawal, it would look like the balance you are claiming is $1.

How to Show the “Highest Available Balance” on the Day of Filing:

Get a bank statement, one covering the month that the Bankruptcy Petition was filed. That will show deposits and withdrawals. If possible, provide that to your attorney a few weeks before the scheduled meeting of creditors. If you are in St. Charles County, that meeting of creditors will take place in Wentzville. This will satisfy this bankruptcy requirement. Click here for additional information about that 341 meeting. Generally, the Chapter 7 Trustees will prefer a full statement, rather than a few days’ worth of transactions. Remember, you’ve disclosed everything, and you’ve been honest in your petition, there’s nothing to hide, so get the full statement to the trustee covering the highest available balance on the day of filing. If a full statement is unavailable, you’ll want to get at a minimum the transaction history for the day of filing, as well as the days before and after the filing.

Guss Markwell is a Bankruptcy Attorney, located in St. Charles County Missouri.