Why You Need to Gather So Many Damn Documents
When a client retains me for a bankruptcy consult, they need to gather quite a bit of information in order for me to file their petition. The bankruptcy Trustee looks at the last six months of household income in order to determine if the debtor(s) fall under the median income cap for their family size-this is called the means test. The basic principle is that if the debtor(s) last 6 months of income is less than the cap for his family size he/she is able to file a Chapter 7 vs. a Chapter 13 which is the difference between a total discharge of all debt and a repayment plan. The documents that you are asked to gather help support your declaration of income.
Information Needed to File for Bankruptcy
In order for the Trustee to feel satisfied that you’ve accurately reported your income they will or can review the following documents:
- The last six months of paystubs for all wage earners in your household;
- The last three years of tax returns;
- The last six months of bank statements for all checking and savings accounts.
While there are more documents that need to be gathered in order to file, the ones listed above cause the most heartache. What makes the process even more aggravating is that the aforementioned documents must always reflect the six month period preceding the filing of your petition. So if you fail to gather all of the documents and we go into a new month, you now have to gather all of the documents for the new month as well as the ones you were missing.
The main point to take away from this post is that when filing for bankruptcy, your timely response to my request for documents is extremely important! As always, I can help guide you through the process and make is as painless as possible.