If you file for Chapter 7 or Chapter 13 bankruptcy, you must complete forms that disclose your income, expenses, debt, and the types of real property (real estate) and personal property you own. One of the forms is called the Statement of Financial Affairs for Individuals Filing for Bankruptcy.

On this form (which you may find and complete on the uscourts.gov website) you will list financial transactions you made up to ten years before you filed for bankruptcy. The bankruptcy trustee will review these transactions and may undo a sale, gift, or transfer of property the trustee determines should be used to pay your creditors. Sales, gifts, debt payments, and transfers of property to your friends and family members are known as insider payments, and will receive the most scrutiny.

In Connecticut, as in all states, when filing for Chapter 7 or Chapter 13 bankruptcy, individuals are required to complete and submit various forms that provide a detailed account of their financial situation. Among these forms is the Statement of Financial Affairs for Individuals Filing for Bankruptcy, which is available on the uscourts.gov website. This form requires the disclosure of significant financial transactions made in the period up to ten years prior to filing for bankruptcy. The bankruptcy trustee assigned to the case will examine these transactions to identify any that may be subject to being undone, such as sales, gifts, or transfers of property that could be used to repay creditors. Transactions involving friends and family, often referred to as insider payments, are particularly scrutinized for potential preferential treatment or fraud. The trustee has the authority to reverse certain transactions if they are deemed to have been made with the intention of hindering, delaying, or defrauding creditors.