What you need to file...


Everyone has heard that the new bankruptcy law makes it "harder" for people to file bankruptcy. According to the people behind the law, the purpose of the changes is to "catch" people with higher incomes who shouldn't be filing Chapter 7 and to steer them into a Chapter 13 repayment plan.

One of the biggest changes made is how information is reported in the bankruptcy documents, especially about household income.

The problem with the new law is that it makes it harder for everyone, not just wealthier people, to prepare the documents. Only debtors whose households make over the median income for their state have to complete the full Means Test, however everyone has to report the information to get to the base income calculation to determine if they have to take it.

If you are considering filing for bankruptcy, there are records that you should make sure you save and have available, just in case.

Even if you aren't filing for bankruptcy, it is a good idea to keep good records. You may need to prove that your credit report is incorrectly reporting an item, or you may be asked to pay something you don't owe. You might need the records for tax preparation, or simply to figure out what your budget is and what you spent your money on.

I find that if people keep good records, the process is much easier and we can proceed without much difficulty.

Here are the highlights and most important documents needed if you are thinking of filing for bankruptcy:

You do not have to have all of these documents to consult an attorney, but if you have it available it can make the process much easier if you do decide to file and an attorney can give you better advise from the start if you have a good idea of what all this information is.

4 months of pay stubs / pay advices / income information: This includes all sources of money and may be things you might not think of. It starts with what people consider regular job income: Be aware that as companies move to online pay information, you may only be able to print a "complete" pay stub with the current information AND the YTD (year to date) information up until your next pay period. You may not be able to go back and get that information if you didn't print it. You may also need the YTD information for preparation of taxes or for domestic purposes too. Print and save your pay information each pay period and put it in a safe place.

Pay information is required for your spouse even if he/she is not filing bankruptcy with you.

You also need information on all other sources of money that come into your household, such as regular gifts from others, support, part time jobs, sale of property, rent, and anything else that comes to mind. You may not have to include it all, but it sure will be easier for your attorney to prepare your documents with all your information easily available. Detailed business records for income and expenses, especially for a six months before filing.

Tax documents: Tax Returns (Federal and State) for the previous two years.

Bills: You need to provide all recent bills and collection letters, and if you don't have recent ones you might need to have old ones. If the accounts have been turned over to collections, you probably want to find the original creditor's bill too. Credit reports do not have all the information needed, nor does a credit report have a complete list of everything you owe.

Credit Report: While a credit report is not necessarily complete, you should always be aware of what is being reported anyway. Sometimes there is something showing up on the report that you might not be aware of.

Bank statements: It is good to have at least six month's worth available for all bank accounts.

Retirement accounts: Recent statements, possibly some past years, and any books/documents which explain your retirement program.

Of course, this is just a start on the information needed in your bankruptcy petition, but if you keep these paper records available, the bankruptcy process can be much easier for you, or dealing with other problems with debts in regular life.

Lease/mortgage agreements: If you currently have car purchase/lease agreements, for automobiles, home equity, or recreational vehicles, you need to provide copies of them to the court for their evaluation.

Home and Real Property: If you own a home or other real property, you need to provide copies of your deeds, tax statements, appraisals to verify what the value of your own and the balance of what you owe.

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