30 Mar Are You Really Ready to File Bankruptcy? Things You Will Need.
You’ve gotten some information about bankruptcy and you think that you need to file. But are you really ready? Do you have the documentation that your attorney will need? Keeping in mind that practices vary across the country, this post will discuss some of the basic documentation you will need for your attorney so that you avoid the “dump and run.”
One requirement under the Bankruptcy Code is that you complete a Statement of Current Monthly Income (Form B22). If you are employed, you will need all of your paystubs or other evidence of pay that you received for the six months prior to the month that you filed bankruptcy. This means that if you anticipate filing bankruptcy in April, you will need to provide your attorney your paychecks for October through March. It also means that, if you get a paycheck in April, you will need to provide those checks to your attorney as well.
If you do not routinely save your paychecks, get a printout from your employer showing all of the deductions (income tax, FICA, state tax, health insurance, etc.) for the relevant time period. If you receive commissions or other bonuses, you will need those checks, too.
If you are self-employed, you may not receive regular paychecks. Provide your attorney with the documentation that you use to determine how much money you have or how you pay yourself. Most small businesses use computer software that can easily provide this information.
For some small businesses, it is not so easy and it may require some imaginative thinking to document income. One client of mine was a dog groomer and she charged her customers $10.00 per dog. We copied her appointment book and multiplied the appointments by $10 to arrive at her monthly gross income figure. This was deemed adequate proof of income.
You will also need a listing of all of your creditors. As your attorney will stress to you, you must list all of your creditors. We prefer to have recent billing statements because the payment address and the “correspondence” address particularly for large, institutional creditors, often are not the same. In fact, some creditors will even list a “bankruptcy noticing” address. You will want to make sure that the bankruptcy court notices get to the right department for your creditors. Gather up the billing statements and, if you are able, make front and back copies for your attorney. This makes it easier for the attorney to scan these documents.
If you have not been paying your creditors for awhile and don’t have billing statements, a recent credit report is a necessity. You are entitled to obtain one free credit report per year from each of the major reporting agencies. You can obtain those reports from www.annualcreditreport.com. If you have not heard from one of your creditors in a while, the account may have been sold and your credit report may show that to be the case.
You will also want to make copies of the appropriate paperwork for secured debts such as your mortgage paperwork or car contracts. Your attorney will want to make sure that the security interests giving your creditor the right to repossess its collateral is correctly documented or “perfected.” Also, it will have the exact payment information and, for cars in particular, whether a cram-down is feasible or whether the vehicle should be paid through a chapter 13 plan.
Similarly, your attorney will want to ensure that property is correctly titled. For example, if a couple is married and have a house, the attorney will want to verify that the house is jointly titled to both husband and wife instead of just in the husband’s name alone.
If you have been sued and a judgment has been entered against you, you will want to provide this information to your attorney. There are sections in the bankruptcy paperwork that requires you to list any and all lawsuits that you have been involved in. Also, if a judgment has been entered against you, that may change the debt from an unsecured debt to a secured debt with a judgment lien against your property. You will want your attorney to know these things so that appropriate action can be taken. If you do not have all of this paperwork, it may be necessary to go to the clerk of court’s office and obtain copies.
You will also need your tax return for the most recent tax year. It is a good idea to provide your tax returns for at least three years to your attorney (but defer to your attorney’s desires for documentation). If you owe any taxes, please be sure to gather up all information that you may have received from the IRS or your state or local taxing agencies. This will be very important information for your attorney.
You will also want to gather up your routine bills such as electricity bill, heating bill, determine how much you are spending on groceries for your Schedule J form of your bankruptcy petition. You will also need this information just so that you know where your money is going.
Bankruptcy cases are subject to random audits by the United States trustee’s office or by the Bankruptcy Administrator’s office (in Alabama and North Carolina). You want to provide good accurate information to your attorney so that if your case is selected for audit, you will not have any worries.
Finally, organize the documentation so that it not a mass of paperwork becoming a creature unto itself. Your attorney will love you for it and your case will progress much, much faster.
This is not intended to be an exhaustive list of the documentation that you will need for your bankruptcy filing. You should defer to the specific requirements of the attorney you select and use this as information only.
Adrian Lapas, Esq.
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