Joint Bank Accounts and Filing for Bankruptcy
Often we talk to individuals filing for bankruptcy who are concerned either their spouse or another person close to them, who they share a bank account with, will be negatively impacted by their filing for bankruptcy. This concern often arises in cases where only one spouse is filing for bankruptcy or where a child and parent jointly hold an account. So what happens to funds held in a joint account when only one of the account holders may be filing for bankruptcy? The answer to this question relies heavily on the debtor’s ability to provide documentation and appropriate disclosures on the net contributions to the account. It really all comes down to net contributions. If there is a substantial amount of money in the account, the U.S. bankruptcy trustee may ask for documentation showing who deposited what. If you are able to show the debtor contributed little or nothing to the funds in the account, the other person may not have to worry too much about the trustee dipping in. If on the other hand, the debtor is the main source of the funds, the other person should be nervous because that means the trustee will likely take the funds if they are not somehow otherwise exempt. Either way, the joint account should be disclosed. Where you really can get into hot water is when you remove your name on a joint account just prior to filing for bankruptcy or otherwise try to avoid and not disclose certain accounts or funds.
Bankruptcy in Utah – Debt Relief Lawyers
If you will be filing for bankruptcy, before you do anything with a joint account, meet with a bankruptcy attorney in our office today. We can give you legal advice on what steps are appropriate to take prior to a bankruptcy filing and also give you an idea of property you will be able to keep and what might be surrendered in the bankruptcy estate. We can also help in determining your level of risk with a joint account. Call anytime for a free consultation over the phone or in our office, 801.413.1753.