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 Kansas, 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. 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 debtors to disclose significant financial transactions made in the years leading up to the bankruptcy filing, potentially going back as far as ten years. The bankruptcy trustee assigned to the case will examine these transactions to identify any that may be considered preferential or fraudulent transfers. If the trustee finds that certain assets were improperly sold, gifted, or transferred—especially to insiders such as family and friends—those transactions can be reversed, or 'avoided,' to recover assets that should be available to pay creditors. The scrutiny of insider payments is particularly rigorous, as they may be seen as attempts to shield assets from the bankruptcy process. It's important to note that both federal law and Kansas state statutes govern bankruptcy proceedings, and the specific outcomes can vary based on individual circumstances.