STEP ONE: Inventory Assets
You will need to do an inventory of all of your Assets and Debts. In a Bankruptcy the debtor does not get to pick and choose which assets or debts are included. Full disclosure is mandated by the Bankruptcy Code.
You also should not transfer any property or close any accounts without first consulting a lawyer. Hiding assets is the quickest way to get a visit from the FBI, which investigates bankruptcy fraud.
You will also need to place a value on each Asset. I generally tell people that the value of your belongings is what you would expect to get for them if you held a garage sale. So that couch you bought for $2,000 a few years ago, would probably only fetch a few hundred dollars today. If you aren't sure what your personal property is worth, head over to someone else's garage sale or estate sale and look around at prices.
STEP TWO: Inventory Debts
I will get your credit report for you. However, you will also need to make a list of to whom you owe money because the credit report likely does not include all of your debts. Not all creditors report bad debt. And if a creditor is not listed and does not get notified then that debt may not get discharged.
Again, all debts must be listed. Including those owed to your family and friends. They are most likely an unsecured non-priority creditor, just like a credit card or medical debt. Beware that you will be asked under oath, subject to penalty of perjury, whether you have made payments to "insiders".
STEP THREE: Prepare a Budget
All Income and Expenses will be disclosed during the bankruptcy. Additionally, 6 months of pay information is required for the Means Test worksheet. So gather your paystubs for the last 6 months, from all sources, and set them aside to deliver to your lawyer.
Normal monthly expenses are averaged, so if you have a utility bill in the summer and winter that is high and a utility bill that is lower in the fall and spring, then average them out for your monthly utility bill. The forms that I send have this information within them so you don't have to guess at your monthly expenses.
STEP FOUR: Document Gathering
Chapter 7 Bankruptcy and Chapter 13 Bankruptcy is very document intense. This means that debtors must provide verification of many of their assets.
Trustees require copies of the following documents in order to accurately assess your case:
- Bank Statements for the immediately preceding 60 days prior to the bankruptcy filing
- Federal and State Income Tax Returns for the previous 2 years
- Titles to vehicles, boats, trailers (anything with a title)
- Real Estate Deeds
- 6 months of pay stubs
- Child Support Judgments
I request my clients obtain these documents prior to filing as there are deadlines in turning them over to the trustee. I will scan and upload the necessary documents for you.
STEP FIVE: Bankruptcy Courses
You will need to take the Credit Counseling Course prior to filing. Follow my link for instructions on completing the first course. Input my code when requested and the counseling company will automatically forward me a copy of your completion certificate.
STEP SIX: Payment
I do accept payment arrangements on a Chapter 7 Bankruptcy with the understanding that the petition and schedules will not be filed until full payment of attorneys fees and filing fees. But if creditors are hounding you and you wish to divert those calls to my office, then once I am partially retained I will accept those calls and acknowledge that I am in fact representing you in a bankruptcy.
STEP SEVEN: Petition and Schedules
Upon return of the list of assets, debts, income and expenses (the questionnaire that I will have initially emailed to you), then I begin drafting the Bankruptcy Petition and Bankruptcy Schedules. Once the draft is complete we will meet and review them and make any corrections.
STEP EIGHT: Bankruptcy Filing
We will sit down and review the final draft together. Upon approval the bankruptcy is signed and then I will electronically file the petition and schedules with the bankruptcy court.