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Do I need to disclose a zero balance paypal account when filing ch.7?
Anonymous1 views3 answers
If I have a PayPal account with zero balance, do I need to disclose it to the trustee when filing ch.7 bankruptcy? This account previously had a balance ranging at a maximim of $500 and below over a period of 12 months for each month. The money was aquired from under the table transactions so I strongly do not want to disclose the information in fear of other legal issues. At the moment, it has a $200 balance that I plan to withdrawl today and then leave a zero balance for a month prior to filing the bankruptcy. I will plan to keep the account status open so that closing it wont drawl any further attention.
Yes, you have to disclose it.
There are specific questions in the schedules asking you about any account that are open or that have been closed within the last year (I think). If you don't disclose the Paypal account you will be lying on your bankruptcy petition.
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I am assuming that your Paypal account is a deposit account, not the Paypal credit account, right?
You will need to list all your bank accounts, and the Paypal account is a sort of bank account. You also will need to turn over records of all deposit accounts, usually going back 6 months.
The Bankruptcy court & the IRS do not generally share information, so I wouldn't worry about any issues with you not reporting income to the IRS. But now that you are going into Bankruptcy, you do not want to play the same game with them! Be sure and report 100% of your income to the Bankruptcy Court, even if it is "under the table."
Good luck!
You have to disclose any income that you received from any source for the last 6 months. That includes money that was deposited into that account. Depending on local practices, you may have to turn over statements for that account that include the balance on the date of filing. You also have to disclose the existence of the account regardless of its balance. You also have to disclose the cash that you withdrew.
[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]
