In Bankruptcy Information, Bankruptcy Questions

Whenever a prospective client contacts me about a bankruptcy I give them a list of documents and information that I need. It’s a fairly standard list that all bankruptcy attorneys ask for, and it’s pretty comprehensive. A lot of clients wonder why bankruptcy attorneys need all this information. There are two reasons First, it’s your obligation to disclose all your assets and all of your creditors in your bankruptcy. You can’t keep anything out. The list of information is designed to help jog your memory about types of things you might own so that you don’t inadvertently omit something. The second is that it’s my job to make your bankruptcy go as smoothly as possible, without raising red flags that would cause the bankruptcy trustee to start digging into your affairs any more than is necessary. With that in mind, here’s a list of what I ask for and some of the specific reasons I ask for it.

Bank statements
I ask for three months’ bank statements so I can see if there were any unusual deposits or withdrawals. The trustee will ask for the same thing and I don’t want to be caught flat-footed if there is a large deposit and I don’t have an explanation for it.

Four years’ tax returns
Along with the debtor, I have to sign a certification that the debtor has filed her last four years tax returns (to the extent she is required to file). I can’t do that without seeing the actual returns. In addition, if there was a substantial decrease in income during that time, I need to know what happened.

Proof of charitable contributions
It’s perfectly allowable to make charitable contributions as part of your monthly budget. However, if someone claims to make these regular contributions the trustee (and I) need to be assured that they are actually making them. Sad as it is, some people will lie about making a charitable contribution so they can hide some money in their budget.

Six months of pay stubs
In order to qualify for Chapter 7, debtors have to pass the Means Test. In order to do that we need pay stubs from all sources of income during the prior six months (the month of filing isn’t included). The Means Test averages income from all sources over the last six months to arrive at what the Bankruptcy Code calls “Current Monthly Income” or CMI. It multiplies that by 12 to get annual income and compares that against the median income for a family of the debtor’s size. If the calculated annual income is lower than the median income, the debtor “passes” the Means Test and may file Chapter 7. If not, the debtor must file Chapter 13.


Bankruptcy questionnaire
Most bankruptcy attorneys have a questionnaire that we ask clients to complete. This gives all the basic information such as name, address, social security number, property you own, debts you owe, income, monthly expenses and a lot more that is necessary to include in the bankruptcy petition and schedules. It’s long. It’s boring to complete. And it’s absolutely necessary. If it’s incorrect or incomplete, it’s your bankruptcy, not mine, that’s at risk. So please take the time to complete this questionnaire accurately and completely.

Checklist
This is the list of documents and information that I ask for from my clients. It’s the first page of a 30-page questionnaire. Many of those pages are for entering information about the creditors. If there are fewer creditors, the questionnaire won’t be as long. Other pages are lists of different types of property that the debtor might own, such as real estate; cars and other vehicles; household goods like couches, TVs, and appliances; financial assets such as bank accounts, business interests and intellectual property; animals; jewelry; and clothing.
[ ] Consumer Credit Counseling Education Certificate
[ ] This Completed Intake Packet
[ ] Past Four (4) years income tax returns (both State & Federal)
[ ] Last Six (6) month’s paystubs from ALL sources of income
[ ] Last Three (3) month’s bank statements from all banking institutions
[ ] Proof of any Charitable Contributions during the past year
[ ] Copy of most recent property tax notice for any land or house you own or are purchasing
[ ] Copies of all bills received during the most recent billing cycle

Credit reports
Credit reports are helpful but not necessary and they don’t always give a complete picture of the debtor’s debts. Sometimes creditors don’t report a debtor to the credit reporting agencies. In that case, the debt will not appear on a credit report. Therefore, relying completely on a credit report is dangerous. On the other hand, obtaining a report will often show older debts that the debtor may have forgotten about. Having a credit report in conjunction with the debtor’s own records is the most comprehensive method of determining what debts exist. Individuals are entitled to one free credit report from each of the major credit reporting agencies every 12 months. You can get more information on how to obtain your free credit report here.

Contact Us
If you have bankruptcy questions, if you’re unsure of your options, if you need to file, contact us here or call or text (801) 413-3708, or email steve@schamberslaw.com. Due to the economic turmoil caused by Covid-19, we have temporarily lowered our rates to help.

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