What Kind of Information is Needed for a Bankruptcy Case ?

Posted by Kevin Ryan | Nov 01, 2017 | 0 Comments

The first thing that every bankruptcy attorney needs to discuss with a potential client is the importance of complete and accurate documentation for the case.   In a consumer, or “non business” bankruptcy case,  the client will need to locate the last two (2) years of federal income tax returns, including all schedules that were attached to it and filed with the Internal Revenue Service.   The attorney for the case will be required to file under seal the most recently filed federal income tax return of the debtor, except in cases where the debtor is not required by law to file a return.   

The attorney for your case will also need to review the last six months of pay stubs and any business income and expense reports for self employed individuals.   The pay stubs are needed for completion of the means test for a Chapter 7 or Chapter 13 bankruptcy case.  There are certain income limitations that apply depending on the client's household size, and region of the country.  The IRS maintains quarterly statistics of the median income for all regions of the United States, and these thresholds are used as measuring guides to determine if a particular debtor is over the median income and thereby presumed to be not eligible to file a Chapter 7 case.   The pay stubs and /or business income information is important to provide in any case so that the attorney can determine whether you can file a Chapter 7 case, the cheapest, fastest way to get out of debt ( in the majority of filed cases a discharge order is issued about 90 days from the date the case is filed.  

After examining your income records, your attorney will need to examine your credit reports which can be obtained for free at www.annualcreditreport.com or at www.creditkarma.com.   You should also gather up any other recent billing or collection notices you have received for your debts, and put them all together in a folder, with your pay stubs and tax returns.

After gathering all of your debt information, you should then look for copies of the titles to your vehicles, including motorcycles, campers, trailers, boats and any other vehicle that requires a legal title.  You should also provide your attorney with a copy of the most recent deed to any real estate you own.   You should make sure that you have claimed the homestead exemption at your county probate court for your residence. These items will assist your attorney in preparing your exemptions schedule for your bankruptcy case ( Schedule C)  Schedule C summarizes the individual statutes which protect your property, sort of like a legal force field.  

If you are in business, your attorney will need to see an Income & Expense Report, Balance Sheet and the corporate or business income tax returns you filed for the previous two (2) most recent tax years.  If the business owns assets under the business name, you should provide your lawyer with a copy of these titles.  Again, documentation of all of your personal and business assets is necessary so that your lawyer can determine the best Chapter of the bankruptcy code that protects all of your property.   In some cases, after all of the titles are examined, the attorney and client may determine that one or more assets will be surrendered either to the creditor ( if the loan is behind or unaffordable), or to the the bankruptcy estate ( if there is equity in the property and usually a lien that the debtor cannot afford going forward).   

If there are any ties to a probate estate you must make your attorney aware of this.    Your attorney should ask you if there have been any deaths in the family going back at least two (2) years, and a determination must be made as to whether you anticipate receiving any money or property from the estate.   This also applies to personal injury and wrongful death claims, sexual or racial discrimination claims, and any other legal claim where the debtor can reasonably anticipate receiving money or property in the future.   If there is a legal claim, the claim must be listed on the bankruptcy personal property schedules ( Schedule A/B) or the opposing party in a civil suit can secure a dismissal of the case for failure to name the Bankruptcy Estate as a party.  The Bankruptcy Estate cannot be a party if the debtor fails to notify the attorney of the claim and the bankruptcy estate is closed with no mention of it.  In other words, your personal injury or other claim can be lost by simply failing to disclose it in your bankruptcy case.

Your attorney will also want to examine your bank account statements for up to the previous six (6) months.   If there have been numerous charges on your credit cards in the previous six (6) months, you should print out the credit card statements for those months so your attorney can examine them.  In some cases, the Debtor can be sued by a creditor where large charges were made to a credit account prior to filing the bankruptcy case, especially if the charges were made within 90 days of filing.   Simply notifying your attorney of this issue can help in determining exactly when the bankruptcy case will be filed.   

Your attorney will need to know if you were involved in any situations where another person can claim that you caused an intentional injury. Claims for damages caused by a bankruptcy debtor cannot be discharged where the conduct that caused the damages was intentional. This includes misappropriation of funds, theft, assault, rape murder, etc.  You cannot discharge damages caused by most types of criminal conduct, since criminal conduct by definition is intentional ( intent is required for a conviction).  

Most attorneys will provide a potential client with a Client Information Worksheet and Document Checklist prior to meeting on the case. These items are important for both the lawyer and the client.  The lawyer needs to review the information and documents provided by the client, and the client needs to review the questions and information which will be required as the case moves forward.   

When both the attorney and client have some basic preparation to work off of at the first meeting, important issues such as the cost of the case, the existence of legal issues, and existence of problems which may require deferring case filing to a later date will come to the surface. It is important to remember that there are no “dumb” questions when meeting and discussing your case with your attorney.   Always err on the side of over-disclosure to your lawyer, because all communications with your lawyer are confidential.

About the Author

Kevin Ryan

"I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. And I'll make them go away."  -Kevin Ryan, Attorney at Law Kevin Ryan is a graduate of the College of Wooster and the Cleveland Marshall College of Law. He is admitted to practice before all Alabama State Courts, the United States District Court for the Southern District of Alabama, and the United States Bankruptcy Court for the Southern District of Alabama. The United States Bankruptcy Court is a part of the United States District Court. Since 1998, Mr. Ryan has represented thousands of individual clients in bankruptcy, criminal, divorce, probate, personal injury, and real estate matters.  Attorney Ryan is also a licensed real estate agent in Alabama.  He handles  Bank-owned properties, short sales, and conventional sales in addition to conventional real estate listings.   This wide range of experience enables Attorney Ryan to take a wider look at your legal matter. It is important to consult with an attorney who can see from experience how other legal issues may affect your situation, and advise you accordingly. Personal Info Kevin Ryan is a member of First Baptist Church in Silverhill, Alabama. He resides in Silverhill with his wife Jessica and their three children. Committed to helping our Clients achieve a fresh financial start Our practice focuses primarily on consumer bankruptcy matters under Chapter 7 and Chapter 13 of the United States Bankruptcy Code.  Our law practice also includes matters where bankruptcy litigation, appellate work, or involvement in civil lawsuits is needed by a client.     No representation is made that the quality of any of these legal services is of higher quality than another attorney or law firm.   The United States Bankruptcy Code requires the following notice:  We are a Debt Relief Agency, which means we help people get legal relief from their Debts through the bankruptcy process. Interested in learning more about our bankruptcy attorney near Mobile, Alabama? Contact Us for help with chapter 7 bankruptcy or chapter 13 bankruptcy in Mobile, Baldwin and Washington counties. Education Juris Doctor, Cleveland Marshall College of Law, 1997 Employed full time as a paralegal while attending law school in the evenings. B.A., The College of Wooster, 1994 NCAA Div.III All Conference (N.C.A.C.) Football Team : Defense 1993; Most Inspirational Senior Award 1993; Co-captain 1993; Letterman 1991-1993; Phi Sigma Alapha Fraternity 1991-1994; Athletic Director Jurisdictions Admitted to Practice Alabama


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I'll BE there for you.

I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. - Kevin Ryan, Attorney at Law