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 Hawaii, as in all states, when filing for Chapter 7 or Chapter 13 bankruptcy, debtors are required to complete and submit various forms that provide a detailed account of their financial situation. One of these forms is the Statement of Financial Affairs for Individuals Filing for Bankruptcy. This form requires the disclosure of significant financial transactions that occurred up to ten years prior to filing for bankruptcy. The purpose of this disclosure is to allow the bankruptcy trustee to examine the transactions for any irregularities, such as preferential transfers or fraudulent conveyances. If the trustee identifies any such transactions, they have the authority to potentially reverse these actions to recover assets for the benefit of creditors. Transactions involving friends and family, known as insider payments, are particularly scrutinized to ensure that all creditors are treated fairly and that no preferential treatment was given. The forms for bankruptcy filings, including the Statement of Financial Affairs, can be found on the United States Courts website at uscourts.gov. It is important to fill out these forms accurately and completely, as providing false information can lead to penalties, including the denial of discharge of debts. An attorney specializing in bankruptcy law can provide guidance through this process to ensure compliance with both federal bankruptcy regulations and any specific requirements that may apply in the state of Hawaii.