Personal Bankruptcy and Cash

[Paultrae]

What is the name of your state?Texas
How does a trustee find out about cash or cashiers check. I took a loan from my Mom a year ago. We still owe her about $10,000. We are about to have to file bankruptcy, but I need to pay her back. We sold some property in Nov. 2004. We took some money and put it away in cashiers checks so that we could pay her. I don't want to break the law, but is the cash going to be traced? Do they go looking through your house for cash or cashiers check.

[AttorneyOney]

The trustee finds out because the debtor tells him on the petition. A debtor swears that the petition is complete and accurate, meaning that it lists all assets. That emphatically includes cash, cashier's checks, etc. Omitting an asset can result in a jail sentence.

Worse yet, payments to insiders (and Mom is an insider) within the year preceding a petition can be set aside by the trustee as voidable preferences. A creditor, even a mother, who is the subject of a preference recovery lawsuit is usually not happy and may have to scramble to come up with the cash. Concealing a preference payment is another act that can lead to a jail sentence.