Information for Proper Filing of Bankruptcy
The U.S. Supreme Court, in a 1934 decision, stated that bankruptcy was to give an "honest but unfortunate debtor a new opportunity in life . . . and a clear field for future effort . . ." A vital step allowing the bankruptcy courts and trustees to determine who is an honest debtor involves collecting certain information from the person filing for bankruptcy.
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Income Information
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You must provide copies of all pay statements and any other evidence of payment to you by an employer for the 60 days prior to filing for bankruptcy. This is used to verify that your income is what you stated on your bankruptcy petition. You must also provide a statement of your net income per month. The trustee will want to know if you are anticipating any substantial increase in your income over the next 12 months. Your income must be below the state median income level to be able to pass the means test for a Chapter 7 bankruptcy. This information will help establish whether you qualify.
Historical Information
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You will need to provide a copy or transcript of your income tax returns for the last two years. You should redact, or black out, all but the last four digits of the Social Security numbers for those who are filing. You should also redact the names and Social Security numbers of any minor children who are claimed as exemptions. A certificate stating that you have undergone credit counseling within the last 60 days will have to accompany your filing of paperwork as well.
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Present Information About Assets
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You will need to disclose your assets. If you own your home, you will need to bring something that shows its value, like a recent tax bill. List any vehicles that you own as well as their value. The value of all household items must be stated, keeping in mind that this is the amount they would sell for at a garage sale. Provide a list of any other items you own that have higher values than most household items such as jewelry and firearms. List the value of retirement funds such as 401k accounts or IRAs. These are probably exempt from seizure but must be listed. Also list the balance of your checking and savings accounts on the day of filing and provide a bank statement. The lower these balances are, the better. Make certain that you list all of your assets, even if they are exempt by the laws of your state. Failure to list any assets constitutes bankruptcy fraud.
Debt and Creditors
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The bankruptcy court will send a letter announcing your bankruptcy filing to all of your creditors. For them to do this, you must provide a list of everyone that you owe money to. Getting a copy of a recent credit report can help you list all of the creditors so you don't forget anyone. It will cost extra to add creditors to the filing later. Include bills that aren't listed on your credit report as well, such as utility bills or medical bills. Include private loans from friends or family, even if you intend to pay them back later. Indicate any loans that you wish to reaffirm, or promise to pay back. You will need to file a form with the court outlining your intentions.
Budget Information
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Part of your filing will be a projection of your monthly budget after bankruptcy. If you have enough disposable income left over after you pay your monthly bills, the bankruptcy trustee may rule that you can repay some of your debt and place you in a Chapter 13 repayment plan. Be realistic with your income and your expenses; your expenses will probably be higher than you expect after your bankruptcy is complete.
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References
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