How current does my background info need to be?

Financial information provided to your attorney prior to filing should be current and accurate.  Out of date information is likely to contain inaccuracies and inaccurate information can result in objections or possibly even dismissal of your case.

your eligibility for Chapter 13 depends in part on whether you fit within debt limits set out in the Bankruptcy Law.  Currently you can have no more than $383,175 of unsecured debts or $1,149,525 of secured debts.  While debt limits are not an issue for most people, your Chapter 13 case will be dismissed if it turns out that your debts exceed these limits.  If you think that your debts may approach these numbers, you and your attorney need accurate and updated statements about all your debts

your eligibility for Chapter 7 depends on whether you satisfy the means test.  An accurate means test calculation requires your attorney to have documentation reflecting all income received in your household for the 6 months prior to the month of filing.  You will also need to submit “pay advices” at the time of filing documenting household income receipts for the 6 weeks prior to filing. If you use anything other than actual data, your means test numbers may be off and you may find yourself facing an objection from the United States trustee.

calculation of your Chapter 13 plan also depends on accurate means test calculations.  Here, too, actual income information is necessary to determine your minimum payment obligations.  If the Chapter 13 trustee or United States trustee conducts an audit of your income information and it turns out that your reporting was substantially incorrect you could face a motion to dismiss, or, in extreme cases, criminal prosecution

everything in your Chapter 7 or Chapter 13 petition is subject to audit by the United States Trustee’s office.  If the trustee determines that your paperwork contains substantial inaccuracies, your case can be subject to dismissal or criminal prosecution

The Bankruptcy Code obligates your bankruptcy lawyer to conduct a meaningful evaluation of all information provided.  In theory your attorney can be subject to financial penalties if he/she files a petition with significant inaccuracies.  Therefore, experienced and knowledgeable attorneys will not agree to represent you if you are unable or unwilling to provide a full financial picture.

Fortunately, much of the information your attorney needs to prepare your case properly can be obtained relatively easily.  Current credit reports can be downloaded for free at www.annualcreditreport.com.  The IRS and most state tax authorities will provide you or your attorney with current tax information.  And payroll information and bank account information often can be obtained online.

The issue in many cases is time – it can take days or even weeks to gather all the information you need so  you will be best served by starting the process early.