Filing a Bankruptcy Case is a Big Job
Lets be honest about one thing, the paperwork requirements for preparing a bankruptcy case are significant. It is very much like filing a tax return in terms of the detail required. Speaking of tax returns, see to it that all the returns that are due are filed before you meet with Bankruptcy Counsel. We are required to review the last two years tax returns and to make certain all the returns that are due have been filed. The taxing authorities will file notices in your case if any returns are overdue. Additionally, you may be able to discharge certain overdue taxes but only if you have filed the tax returns.
Bankruptcy “Reform” is to Blame
No, we aren’t being difficult, the law requires that we document all of the information that is to be included in your petition. When the Congress passed its version of bankruptcy “reform” in 2005, it required bankruptcy lawyers to investigate more fully the facts and circumstances of our client’s bankruptcy cases. In addition, the “means test” that is now required to be completed involves a review of six months of pay advices and income statements from all sources, including non-filing spouses.
The Paperwork Burden is High
The paperwork burden is even greater for “over median” filers since we may ask for additional documentation to support deductions from income that may be allowed by the Bankruptcy Code.
Making a List, Checking it Twice
We will obtain a copy of your credit report and check the local real estate records to obtain information. We do this to cross check the information you have provided, not as a substitute for the requirement that you provide this information to our office.
We also need to understand the value of all of your assets so we can carefully prepare your exemptions and avoid the claims of Trustees for turnover, if possible. Speaking of the claims of Trustee’s, do not forget to tell us if you transferred any of your property or if you have a remainder interest in your elderly parents real property. It is especially important to mention interests in real estate outside the local jurisdiction because our review may not find these interests. Do not assume the Trustee won’t find them. Keep in mind that most information you think may be hidden is brought to light by careful investigation or a well-timed disclosure from a former spouse or business partner. (No, I am not kidding about this very real possibility.)
Accounting for All Your Assets
Failure to list assets on a bankruptcy petition is a serious matter and bankruptcy fraud is often prosecuted. The day you meet with a Bankruptcy Trustee is not a good day for your Bankruptcy Attorney to find out things you failed to disclose.
Don’t Get Fired
So if you haven’t provided all the necessary information to our office, we may fire you as our client. Trust me, it is for your own good.
Image credit: F. Sigorski