To File Bankruptcy, I Pay Money and Sign A Few Forms, Right?

15 Jun To File Bankruptcy, I Pay Money and Sign A Few Forms, Right?

Oh, if it were only that simple. I suppose in a perfect world, all you would need to do is come up with $1500 to $4500 and sign docs and it would be a done deal.

But unfortunately, there is a lot more involved to file Chapter 7 or Chapter 13 Bankruptcy than just paying money and signatures. There must be full disclosure of your assets, debts, and budget, and only you specifically know this personal information.

Moreover, in most cases, it is mandatory under local rules and the new bankruptcy laws that you supply proof of this information to the bankruptcy trustee or your case will be dismissed.

Many debtors simply assume that since they paid the law firm money, it is their responsibility to complete all the documentation for a bankruptcy filing without their involvement. Such an assumption is no different than assuming one is entitled to a home loan or car loan because they will pay money and sign documents.

Even home and auto loans require information gathering in addition to money and signatures. Bankruptcy is no different. In fact, its probably about 10 to 20 times more labor intensive. The bankruptcy petition and schedules requires an intensive investigation of the debtor’s personal affairs which is as unique in every case as each individual is a unique person on this planet. This is why intensive worksheets and forms must be filled out by all debtors seeking bankruptcy relief.

There are many different ways of information gathering, ranging from worksheets, to one on one interviews, to internet information gathering programs. Many years ago, a debtor would fill out many forms by hand and then the attorney would prepare a bankruptcy petition with a typewriter, to later be filed with the court over the counter with multiple copies.

While a few attorneys still file cases that way, most attorneys these days file bankruptcy cases electronically over the internet with sophisticated bankruptcy preparation software. The hand filled worksheets are on their way out, making way instead to one on one interviews and “turbo tax” type information gathering. These methods provide better accuracy, reduce debtor time and fees, and provide better convenience to all parties involved.

Without a doubt, the “online information gathering” process is the most efficient method of obtaining bankruptcy information. This advance beyond the “hand written worksheets” is sort of like the jump from the horse and buggy to the automobile. Since they work hand in hand with the bankruptcy preparation software your attorney utilizes to prepare your petition, they are virtually error proof. Moreover, they can be filled out anytime and anywhere you have internet access. Finally, they usually provide instant access to frequently asked questions and generally contain a hotline phone number to the law firm to answer any questions along the way. Upon completion, the debtor hits the submit button and the law firm downloads the information to then prepare all the documents for the bankruptcy filing.

But regardless of the intake method used, simply paying money and signing forms does not complete the process. Only the debtor knows their assets. Only a debtor knows their income and expenses. Only a debtor knows which bill collectors are collecting against them in addition to those on the credit reports. Only an debtor can advise who they transferred money or property to over the past 12 months. Only a debtor can advise of where they moved from over the past 2.5 years, who support obligations are paid to, where business and personal records are kept, etc. The list goes on and on.

So be patient with the bankruptcy filing process. A debtor who files for bankruptcy is asking the federal court for extraordinary relief. In doing so, there is a certain qui pro qou that necessarily must go along with the process. If your attorney requests certain information, its not because he or she wants it personally or simply likes to make you work. Rather, its to get your case through the system as painlessly, quickly, and accurately as possible.

Your attorney generally makes no money on continued court hearings and they certainly are not something you seek either. The goal is to get through the bankruptcy process as efficiently and painlessly with as little hiccups as possible, and the more information that is supplied, the easier that process is.

Written by Michael G. Doan

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