Wednesday, November 9, 2011

Items Needed For Filing Bankruptcy

I usually hand out a card with a checklist of what items I need from my clients before filing bankruptcy. This is provided as a convenience, however, I still receive calls from time to time asking what is need when they misplace my checklist.  .......So, here is the list:

1) 7 Months Pay Stubs
2) 7 Months Pay Stubs, Spouse
3) 4 Years Tax Returns
4) Deeds, Titles / Registrations
5) Credit Reports
6) Contracts/Leases
7) 4 Months Financial Accounts
8) Divorce Papers
9) Completed Bankruptcy Kit

Here is a quick and short explanation related to the above items.
  1. 7 Months Pay Stubs. Pay advices are need for 2 reasons. First, the local bankruptcy rules (for the Middle District of Florida) actually require pay advices by submitted to the Trustee after filing. This is a deviation from the literal language of the bankruptcy code. This consist of 60 days of pay advices prior to filing.

    The second reason pay advices are needed is for calculating gross income to determine whether or not it is abusive to file a Chapter 7 bankruptcy, according to the bankruptcy code. The attorney must use 6 months of pay advises, like pay stubs (showing gross income), ending the end of the month immediately preceding the filing. So if you filed on July 31, you would need pay advices from January 1 through June 30 for calculating annualized income for this purpose.

    If pay advices (pay stubs) are lost, go to your employer (or previous employer, as the case may be) and ask for a printout of your pay information. You may need to explain, you need the information contained within the pay stubs of your checks.

  2. 7 Months Pay Stubs, Spouse. Same as #1 above, but if the debtor is married, the “second reason” listed in #1 applies to household income. Hence, both spouses income needs to be disclosed.

  3. 4 Years Tax Returns. The bankruptcy code requires the last 4 years of tax returns must have been filed prior to filing bankruptcy. Although the trustees generally only require 2 years be sent to them, I always send all 4 years (because of the language of the bankruptcy code).  Currently that is your tax return for years 2011, 2012, 2013 and 2014.

    If you have misplaced your copy of your return, or filed electronically and simply never had a copy, you can request a transcript, for free, of your returns from the Internal Revenue Service, or you can go by their local office and get a transcript while you wait. To order a return online by going to the Order Your Transcript page, or you can fill out a 4506-T and fax in your request; the faxed form will allow your transcript to be mailed to an address other than the one they have on file for you (such as your attorney).

  4. Deeds, Titles / Registrations. I like to see any and all deeds, titles, and registrations prior to filing to confirm how things are titled, and anticipate any questions the trustee might bring up. Most trustees ask for a copy of these documents within initial correspondence they mail to the debtor(s). After review the documents, I usually hand them back to my client and explain the trustee will be asking for a copy of them; do NOT send the original.

  5. Credit Reports.  My clients provide me with credit reports.  You can also get a copy of your credit report from Annual Credit  Although there are numerous sites indicating they offer free credit reports, this is the only site authorized for providing you the free credit report you are entitled to annually according to the Federal Trade Commission's web site.

  6. Contracts/Leases. These documents most trustees will want to see a copy of, and the exact language is important for the attorney to review to determine what needs to be disclosed, and how it needs to be disclosed, within the bankruptcy paperwork for filing.

  7. 4 Months Financial Accounts. The amount of financial statements requested by trustees varies greatly. I have found the information contained within these reports tends to be the most important, and should be reviewed by your attorney.

  8. Divorce Papers. If divorced within the past 4 years, I require the papers. Sometimes they can be found online, in the public records. This information may be needed for filing out the papers to be filed with the Clerk of the Bankruptcy Court. Most trustees will ask for a copy of these papers.

  9. Completed Bankruptcy Kit. Most of my clients provide me with this information online, so there is no need to actually bring in a kit. However, a few of my clients do not have access to a computer. For those clients, they will be provided a “bankruptcy kit” to complete and return to my office.


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