Being Organized And Retaining Documents Are Important To Bankruptcy Success
Are you an organized person?
Perhaps you are in some parts of your life, but not in others. Maybe you’re not at all.
I have had clients over the years that range from completely disorganized to the type who tab and cross-reference their Kleenex.
You are all welcome to the bankruptcy party.
However, there are definite benefits to being organized (or getting organized), both inside and outside of bankruptcy. Failure to do so not only creates many problems for your attorney, but potentially for yourself as well and may have even been the cause of your needing to file a bankruptcy case.
Why Do you Need to Be Organized?
First of all, it will help you and your attorney present your case accurately and maximize the protections that are available for you. It make thing significantly easier for your attorney (which can translate into cost savings for you).
Second, at least in a Chapter 7 case scenario, you can be denied a discharge of your debts if you knowingly withhold or fail to provide books, documents, records, and papers relating to your property or financial affairs
But the biggest reason of all is that it will help you. One of the biggest benefits my clients receive from my counsel in bankruptcy is not the discharge of their debts (although that is certainly a big one), but getting their books and records in order so they can see at any given time where they need to cut costs, or alter spending, etc. If their accountant needs to analyze something for them, they have it ready and easy for the accountant to see. This is particularly important for people who are self-employed, but being organized can help anyone.
Specifically, what needs to be organized?
Here are the main things you’re going to need for your bankruptcy filing:
- List of who you owe and how much you owe them
- List of your assets, and what they are worth. This includes everything from real estate to vehicles, to insurance to clothing. Anything you own is an asset.
- Your income for the past 6 months: this would include pay stubs or, if you are self-employed, profit and loss statements.
- Your monthly expenses.
- Your tax returns filed for the past at least 3 years (4 years for Chapter 13 cases).
Within the above there are obviously many sub-categories, which a good bankruptcy attorney will explain to you.
Keeping track of who you owe and all the other information is a good first step, but obviously doesn’t help if you don’t know how to “read” or analyze it. Ask your bankruptcy attorney for how to optimally review your finances to avoid ending up in a similar position in the future.
Image Credit: katerha
