How Much Information Do I Have to Have to File Bankruptcy?

11 May How Much Information Do I Have to Have to File Bankruptcy?

Carmen Delutri wrote this about how she handles the initial consultation with prospective clients. Her procedure is remarkably similar to mine, and most other debtor’s lawyers do something similar. Some may request a little less information, some a little more, but the process is roughly the same, and that’s for good reason. Every bankruptcy case is different, and an attorney needs to know about your individual situation in order to advise you.

While some information is essential, in my view, for an initial consultation and basic advice, the information you will have to provide in order to complete a bankruptcy filing takes it to a different level. In short, it’s a lot. It’s not difficult, there’s just of lot of it. And since your attorney may want you to provide copies of documents that have accumulated over some years (like the deed to your home, or the original contract on your car) it may be time-consuming to put it all together.

Keep in mind that your attorney is not asking your for all that stuff just to be difficult: there are reasons for everything that your attorney requests.  (Trust me, we do not get our jollies reading your old bank statements and tax returns.)  Remember, too, that there is the possibility that any case will be subject to a random audit, which leaves very little room to “make do” with a less than complete information. One of the reasons your lawyer wants that information is to catch potential problems before they occur. That’s got to be a good thing, right?

Many people have opined that the real reason for the increased burden of paperwork imposed by the Bankruptcy Abuse Prevention and Consumer Protection Act [BAPCPA] (or the Bankruptcy Abuse Protection and Consumer Prevention Act, as one wag put it) is to discourage people filing bankruptcy.  I would encourage you not to give up on that account.  But it does increase the importance of promptly consulting a bankruptcy lawyer, as soon as you know you have a problem.  I wrote this about reports of mortgage companies entering into settlement negotiations that go nowhere with borrowers in foreclosure.  Whether their motivations are impure, or they are just inept hardly matters when your home goes up for sale.  It takes time to put together a bankruptcy petition, and waiting until the last minute is just not a good idea.

The other thing I would suggest about the amount of paperwork required for bankruptcy is this–experienced bankruptcy lawyers are all going to want approximately the same information.  If your lawyer lets you take a pass on providing that information, you may want to question whether you are going to pay the price later on.

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