One of my favorite television shows is “The Office.” In one older episode, the main character Michael Scott makes a misguided attempt to resolve his debt problems by publically stating, “I. . . declare. . . bankruptcy!” Unfortunately, that is not exactly how it works. Although Michael's attempt is funny, much more is required to actually file for bankruptcy. I thought I would blog about the different documents that are required to comply with the Bankruptcy laws/rules.
It is not nearly as public, or as simple, as shouting out “I declare bankruptcy!” The bankruptcy process begins with an accounting of your income, expenses, assets, and debts. This is something that we spend a great deal of time on with our clients here at L&J. We require that our clients fill out a large packet, which is more commonly referred to as "homework" around here. And once that is completed, the debtor and an attorney go through each page in great deal, filling in blanks and working out kinks. The debtor is required to use approved forms for this financial accounting. A copy of these forms can be found on the U.S. Courts website, and a general description of each form that must be filed in all consumer debtor Chapter 7 and 13 cases is listed below.
The Voluntary Petition is three pages long and is the formal declaration of bankruptcy. Filing the Voluntary Petition begins the bankruptcy process and imposes the automatic stay which will generally stop action by creditors to collect debts. The rest of the petition is broken up into schedules:
Schedule A is a list of real property. (home, land, etc)
Schedule B is a list of personal property. (household goods, autos, etc)
Schedule C is a list of property the debtor claims as exempt. (stating which law protects what property)
Schedule D is a list of creditors holding secured claims. (mortgages, car loans, furniture loans)
Schedule E is a list of creditors holding unsecured priority claims. (taxes, child support, alimony)
Schedule F is a list of creditors holding unsecured nonpriority claims. (credit cards, medical bills, etc)
Schedule G is a list of the debtor’s executory contracts and unexpired leases.
Schedule H is a list of codebtors in the bankruptcy.
Schedule I lists the debtor’s monthly income.
Schedule J lists the debtor’s monthly expenses.
The debtor must sign a Declaration that the above schedules are accurate to the best of his or her knowledge, information, and belief. This is why we go through each page of the final petition with our clients and any corrections that need to be made are done right then and there.
The debtor must file a Statement of Financial Affairs. This form provides a summary of the debtor's financial history, transactions, and operations over certain time periods before the case is filed.
Finally, the debtor must file either a Statement of Current Monthly Income and Means Test Calculation in a Chapter 7 case, or a Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income in a Chapter 13 case. Congress requires that we compare your average income over the last 6 months, to the average of a household in Florida of the same size. This is more commonly referred to as the "Means Test".
The success of your bankruptcy largely depends on the accuracy of these forms and the skill that your bankruptcy attorney applies in gathering the information from you and drafting these financial reports and documents. Don’t leave your financial future to chance! Seek out an experienced bankruptcy attorney to complete these forms and advise you on the best course of action to resolve your financial struggles.