If a debtor is being represented in a bankruptcy they should allow their bankruptcy attorney to work for them, and the only way their attorney is able to provide adequate representation is if they know all the details about the debtor’s case. If a debtor chooses to omit certain transactions or details then the attorney will not be able to advise appropriately regarding those transactions which could be problematic in the case. 

 Bankruptcy is a big topic, with many interesting facts. 

Both the Bankruptcy Code and Minnesota State law prohibit certain types of transfers of money or property made by the debtor prior to the filing of their bankruptcy case. These prohibited transfers are “avoidable” by the bankruptcy trustee. This means that the Chapter 7 trustee can avoid or undo the transfer by demanding the return of the transferred property from the person or entity to whom the transfer was made, and the trustee can even bring a lawsuit against that person to enforce their legal right to the return of the property.

Many people are entitled receive tax refunds each year for overpayments to the IRS and Minnesota State Department of Revenue from taxes withheld from their paychecks. Sometimes, these refunds can be quite substantial. A debtor’s right to receive a future tax refund is considered property of the “bankruptcy estate.” In a chapter 7 bankruptcy case, property of the bankruptcy estate is all of the debtor’s money and property that is subject to being taken by the bankruptcy trustee to pay the debtor’s creditors. In many cases, most, if not all, the debtor’s money and property is “exempt,” or legally protected from being taken to pay their creditors.