01 Apr Statement of Financial Affairs: What Is It?
This is the first in a series of blogs about the Statement of Financial Affairs and the questions it asks.
The Statement of Financial Affairs (SoFA) is a rather long document that is filed in every bankruptcy case. It consists of 18 questions if you don’t have a business, and 25 if you do.
This series of blogs will discuss each of these questions, and give you some idea as to what is behind them and how to make sure they are properly answered. This will help both you and your lawyer to make sure the information you put down is correct.
Overall, the SoFA is a financial history. It lets the Trustees and the Court know where your case came from–what sort of income, debts and claims have been made against you–and where it may be headed. As will be discussed in these blogs, the practical purpose of the SoFA is to give the Trustees and the Courts the information they need to determine whether you are truthful, accurate and complete in the information you provide.
A bankruptcy petition and schedules (including the SoFA) is like a jigsaw puzzle. All the pieces must fit together in a particular way. If they don’t–and the SoFA is a big part of seeing that they do–the Trustees will generally spend some time digging deeper to see if something was left off (either intentionally or inadvertantly). Completing the SoFA properly is one way to make sure that your Meeting of Creditors and case goes as smoothly and uneventfully as possible.
The SoFA must be completed in all cases–Chapter 7, Chapter 11 and Chapter 13–regardless of whether you are an individual or a business.
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