13. November, 2013|Uncategorized|One comment

This post goes out to all of my Bankruptcy clients (past, present, and future), who I genuinely cherish – as I believe everyone deserves a fresh start when they are down on hard times.

There has come a known trend in my office lately, however, that clients get upset or annoyed when my staff and I call them asking for documents. Let me explain why these documents ARE necessary.

In a Chapter 7 case, known as a liquidation of assets to pay down debts, one of the Trustee’s functions is to determine what assets a particular debtor has. This may be done by examining documents, such as bank statements, tax records, and other financial data. This is of importance, as it also determines whether the debtor has any non-exempt assets (exemptions will be discussed in a future post).

In a Chapter 13 case, document review is equally important, as it assists in determine whether a plan was properly crafted, and whether the debtor’s income is sufficient to substantiate the proposed plan.

HERE is where the problem comes in. As a courtesy, my office provides the clients with a list of documents necessary for my office to efficiently create their Bankruptcy petition. These documents are for purposes of determining income, assets, and debts. The list of documents includes but is not limited to: Bank Statements received within 90 days of filing, updated pay check stubs, tax returns for the past two years, mortgage documentation, and vehicle information (my list is more exhaustive).  When I ask for these documents, many times clients are upset,  because the documents are “too time consuming” to gather, or the clients just don’t want to bother. Although I explain why these documents are reasonable and necessary, for a good MAJORITY of my clients, the light bulb equating necessity does not turn on for them until they attend the Meeting of Creditors.

HERE is what the law Requires:

11 USC § 521 – Debtor’s duties – The Debtor Shall File:

Copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by the debtor from any employer of the debtor. (This includes the month of pay check stubs for the month the petition is filed)

–  a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition;

In addition, 11 U.S.C.  § 521(i)(1) Further Provides –  A “case shall be automatically dismissed” if the debtor fails to file all mandatory documents…”if the following documents are not provided, § 521(a)(1) provides for an automatic dismissal. These documents include:

  • A list of creditors
  • A schedule of assets and liabilities
  • A statement of financial affairs
  • If § 342(b) applies, the certificate of the attorney whose name is on the petition as the attorney for the debtor indicating that the attorney delivered to the debtor the notice required by § 342(b)
  • Copies of all payment advices or other evidence of payment received within 60 days pre-petition by the debtor from any employer of the debtor
  • A statement of the amount of monthly net income, itemized to show how the amount is calculated
  • A statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition

– Hence the reason why we pressure clients to turn these documents in timely! Although clients think it is a pain in the rear to provide all of these documents, EVERY single client who sat through a Meeting of Creditors with me, (and watched other debtors get reamed for failing to provide documents) thanked me….and now you will too! 

Good Luck!

 

Comments
  1. bankruptcy lawyer Denver|15:39, 1. July, 2014 Reply

    Outstanding post but I was wanting to know if you could write a litte more on this subject?

    I’d be very thankful if you could elaborate a little bit further.
    Kudos!

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