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Delayed/withheld payments from affiliates during bankruptcy?

Fort Worth, TX |

1. In the situation of say a sole proprietor going bankrupt, if the person has an affiliate who has owed him payment for many months before the bankruptcy is the person going bankrupt required to report what this business client owes?

What kind of asset is that? It's a owed commission the bankrupter opted not to receive basically but for months like 6 months before bankruptcy. Or are business owners not required to earmark all biz sales done before the bankruptcy to go to the trustee?

This is in a situation of ONLY unsecured credit card debts.

2. Does the bankrupt person have to disclose empty and CLOSED bank accounts, specifically ones closed overseas months before filing and if so how many month must pass before they are not required to disclose them?

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Attorney answers 3

Posted

You are supposed to disclose all of your assets. You need to hire a creditor attorney to help you. Dallas has a good creditor bar. If you fail to disclose assets, you can be denied a discharge or have the discharge order vacated and the case could be dismissed.

Asker

Posted

What kind of asset is this? Basically I promoted their service, they offer a commission and it has not yet been paid. How would I cite this on schedule B? And is there any sort of exemptions for this? I have more than enough cash exemption left over to cover this, could it count as cash? or property? Also, do trustees ask for disclosure of closed bank accounts? (Most of them ask if you have assets overseas but do they ever ask about the "past"?) I closed a few overseas accounts month before, would I need their bank statements. How long back do banks want statements or do they not want them for closed accounts?

Posted

1. Yes. You said this was was a Sole Prop. So the money owed the individual debtor must be disclosed, and likely the trustee will want the money. The type of asset: "account receivable."

2. Yes, the question on the statement of financial affairs is pretty straightforward (question 11)
"List all financial accounts and instruments held in the name of the debtor or for the benefit of the debtor which were closed, sold, or otherwise transferred within one year immediately preceding the commencement of this case"

There is no geographic limitation to bankruptcy.

Posted

1. Yes and list on Schedule B. If you cannot find a category you think this falls into the last paragraph is a catch all paragraph.

2. You have to disclose any closed bank accounts within 12 months of filing bankruptcy.

These are not the only issues you need to worry about. I am also a bit concerned that if you thought you may not have to list money that is owed to you, you may make other assumptions that may cause you harm. I suggest finding an attorney with experience with cases like your situation.

Good luck.

Jim Webster
Scottsdale, Chandler, Mesa & Phoenix Arizona Bankruptcy Attorneys & Lawyers

1845 S. Dobson Rd. Ste 201
Mesa, AZ 85202

(480) 464-4667
Jim@jpwlegal.com

We are a debt relief agency. We help people file for relief under the Bankruptcy Code.

If you live in Arizona, please contact me for actual advice; this is just speculation. It certainly is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a idea of what you might do and how it may turn out.

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