When you file for bankruptcy, you must disclose a lot of information about your finances. This will include activities prior to filing your petition.
According to U.S. News and World Report, if you made financial moves prior to filing for bankruptcy, the trustee may question them as part of the review in your case.
Looking back
The trustee in your case will take a look at the overall picture when assessing your case. He or she will go over what you did financially in the days and months leading up to filing to see if there is any activity that looks suspicious. The trustee wants to make sure you were not getting rid of assets or doing other things to try to hide property or income.
Taking action
If you sold assets prior to filing, the trustee may be able to seize whatever you sold and use it to pay back your debts. In addition, if you maxed out your credit cards, took cash advances or spent a lot of money prior to filing, the trustee may flag your claim for presumptive fraud.
Essentially, when you make financial moves that could defraud creditors, the court looks unfavorably on that. In the three or so months leading up to your bankruptcy, you should be careful about what you do financially. You should not do anything to put yourself into more debt or to waste money you could have used to pay towards your debt. Doing so, could land you in trouble with the bankruptcy court and make it difficult for you to get a discharge in your case.
