Bankruptcy and PayPal

07 Feb Bankruptcy and PayPal

When you file for bankruptcy you must fill out a set of forms. One of those forms is titled Schedule B where you MUST list all your personal property. This means listing everything you own whether it is above the earth, below the earth or in another country. One asset that is often overlooked is money. Money in the form of cash stored throughout a residence, an un-cashed check, funds in a bank account located in another country or in an account that is housed on the Internet.

One such account is called PayPal. PayPal was created in 1998 to allow people to transfer funds over the Internet with ease. In 2002 it was purchased by EBay. EBay users often use PayPal to either purchase or accept payments on items. But the PayPal account is not solely restricted to this use. Many people use PayPal for everyday transactions.

If you are filing bankruptcy, the funds currently in your PayPal account are an asset of your case. Therefore it it is critical that you provide a copy of six months worth of transactions from your PayPal account. This is regardless of whether or not the account has had any changes within the six month period prior to and including the date of filing of your bankruptcy case.

The bankruptcy forms require on Schedule B, section two, that you list of all accounts identified as checking, savings or other financial accounts, certificates of deposit or shares in banks, savings and loan, thrift, building and loan, and homestead associations, or credit unions,
brokerage houses, or cooperatives. You are signing these forms under penalty of perjury and stating that you have listed ALL your assets.

One might think that six months of a transaction history is overkill when in reality this length is required by law. Your attorney or you if you are filing pro se, must review the financial transactions for the six months prior to your filing of the bankruptcy case. This will provide a complete financial history as you are required to report all funds except for Social Security income received in the six months prior to filing bankruptcy. Another reason is if your case is selected for an audit to review the accuracy of your financial calculations, there must be six months of statements available for the auditor.

So if you have ever used a PayPal account and it is still open prior to filing bankruptcy, be sure to inform your attorney of that account.

Remember that knowledge is power. The more knowledge you have about the assets in your possession, the more power you will have to be prepared for an audit and/or avoid being charged with penalty of perjury.

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Former Bankruptcy Attorney to the Kansas City UAW: Ford and GM workers, now assisting the general public in Missouri and Kansas with regaining financial control using the Bankruptcy Code. 816-472-HELP (4357).

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