Understanding the Bankruptcy Forms
Part of our commitment as bankruptcy attorneys is to inform and educate clients about the bankruptcy process. As a part of the client-attorney team, it is important for you to understand the forms you sign as part of your bankruptcy case. You are required to sign many of the forms we will file and verify that the content of forms is true and accurate.
The bankruptcy petition is the document that starts your case officially. It is a 3-page form that includes all the names you have used in the past, whether legal or fictitious and includes the last four digits of your social security number. Information contained in the petition includes:
- Which chapter has been chosen (usually 7 or 13)
- Type of case (for most of our clients this will be individual or joint)
- Number of creditors to whom you owe money
- Your assets and liabilities
- Types of debt you owe (consumer debt, etc.…)
- Prior bankruptcy cases filed in the past 8 years
- Any related cases (filed by spouse, affiliate, or partner) that are still pending
Attached to the petition is exhibit D, where you show that you have completed the required credit counseling within the last 180 days.
When filing a chapter 7 bankruptcy petition, you must include a statement that you are aware of the choices between chapters 7, 11, 12, and 13. In addition, as your attorney, we must also sign a document in a chapter 7 bankruptcy that we have explained the difference between the various bankruptcy chapters. There are a few other specific items that only apply to a small number of clients.
The petition is filed with the bankruptcy court clerk who then submits a copy to the United States trustee.
Statement of Social Security Number
You must submit a form with your social security number or a statement that you do not have one. Some clients wonder why they must submit their social security number and ask whether or not the number will become part of the public record. Your social security number is included in the notice to your creditors but it does not become public.
List of Co-Debtors and Creditors
In Schedules D through G, you are required to provide a comprehensive list of several items. You must give the court a complete list of all the individuals and companies to whom you owe money. You must also include what is referred to any “executory contracts.” What this generally means is that you’ve signed a contract and both parties (you and the other person or company) must still do what you agreed to do in the contract. Some examples of executor contracts include an unexpired lease (for a car or home), layaway contracts, installment payments or contracts for cemetery plots, etc.…. You must also include any co-debtors, those individuals who have co-signed on a loan you received.
You file this list with your petition and the list becomes the basis for mailing notice to everyone legally impacted by your bankruptcy filing.
When you file your petition you include a statement that your received credit counseling from an approved agency. Sometimes a client will create a debt management plan with the credit counseling agency. If this is the case, you will include this as well when you file. If for some reason you don’t submit this with your petition, we must do so within 14 days after filing.
More About Bankruptcy Schedules
We briefly mention above some of the schedules you are required to submit with your petition. When we work together in preparing these schedules, it is important that you include all information. Because bankruptcy can be a delicate issue for clients, we understand if there may be some feelings of embarrassment. Let us reassume you that we have seen all kinds of circumstances in our bankruptcy practice. The economic downturn has hit many clients hard. We know this. Our job is to represent you and in order to do our best, we need full disclosure on your part.
Schedule A – Real Property
In this schedule we will list all of the real estate you own, or have some ownerships rights to. Sometimes when there has been a divorce, you may have ownership rights of some kind, but only limited access. This kind of information is included in schedule A. If you are married, you must indicate whom the property belongs to, such as husband, wife, or joint ownership. We also include the value of the real property in the schedule A.
Schedule B – Personal Property
Personal property encompasses a broad range of property that clients don’t normally consider. Of course, tangible property that you own is included with a location and description of the property. You will also include, among other things, eligibility for government benefits, security deposits currently held by landlords, or earned income tax credits. Because the effect of not including all personal property can significantly impact you, it is better for us to err on the side of including personal property rather than not including it.
Sometimes a client will choose to not tell us about property they own for fear that it will be lost in the bankruptcy process. It is important, just as with your debts, that you disclose any interest you have in property so that we can do our job of maximizing the advantages of the bankruptcy laws to keep as much of you property as possible. If you choose to not tell us something, and this comes to light, you might face legal consequences when the property is discovered.
It is also critical to include all property you own to ensure that when your case closes you will regain ownership of the property when the trustee “abandons” the property. This will happen with non-exempt property at the closing of your case. The trustee abandons any property not sold off to your creditors. If property is not included, questions can arise as to what should be done with it even after you’ve received a discharge.
If you are entitled to a tax refund, you should include this in schedule B. We will take into consideration the size and timing of your refund (along with other factors) to determine when to file your bankruptcy. If you receive the refund while going through the process, we recommend not spending it as the trustee can demand the refund, even if you no longer have the money in your account.
The other issue involved in listing personal property is determining the value of the property. Most personal items are not very valuable as resale items. So when listing value, we will ask you to consider what you might get for the items if you were selling them at a garage sale. If the value of the property were unknown, we would put this on the schedule B. The trustee and your creditors will be left to assess the value of the item. If you are a joint owner of property, it is important to include this in your list.
When you come to the meeting of creditors, you will be asked to bring proof of your bank account balances on the date of filing. You can use an ATM receipt, internet banking printout or even telephone banking to list your balance. It is best not to make any deposits on the date of your filing that might increase your balance over that on the proof of balance you provide at the meeting of creditors.
As you can see from our overview of the petition to file and the first two schedules, we will work closely with you to ensure that all of your debts and property are including the petition filing. By being diligent in our efforts, we will help you to take full advantage of the bankruptcy laws to retain as much property as possible throughout the process. You can call us to set up a free consultation with our experienced Arizona bankruptcy attorneys.