There was an interesting bankruptcy case (Gubellini, Peter W.; In re) involving a debtor who was denied a bankruptcy discharge because of poor record keeping.The details of the bankruptcy case:
After thoroughly examining the debtor’s checking account register and bank statements for the years 2004 through 2006, the court was unable to identify how $74,187, or 36.8 percent, of the debtor’s money was spent during the relevant period.
The reason the court could not identify how the money disappeared? The debtor routinely destroyed all of his cancelled checks and offered no explanation for his actions. Therefore the bankruptcy court determined that because the debtor failed to properly record his transactions in the checking account register and destroyed all of his cancelled checks, his bankruptcy discharge should be denied.
If you are considering bankruptcy, you need to keep very good records of how you are spending your money, especially if large swaths of assets have disappeared. The debtor’s actions in this case makes it appear that he is attempting to conceal where he spent the money. Don’t allow this to happen to your bankruptcy case, make sure that you keep thorough and accurate financial records.