In this blog we will explore a very important step in your Chapter 7 Bankruptcy process: Your Chapter 7 Bankruptcy Petition, Signing and Filing.
Once you have met with me for your free initial consultation, retained me to file your Chapter 7 Bankruptcy Petition and delivered to me all of the required documents, I will then prepare your Chapter 7 Bankruptcy Petition and schedule a convenient time for you to come in to our office to sign your Petition with masks on and proper social distance, or out of an abundance of caution, we can meet on the phone or virtually to eSign your Petition with DocuSign.
Your Bankruptcy Petition signing is a very serious step in your Bankruptcy Process and you will be required to carefully read your petition. This appointment will take approximately one hour in which I will go over each and every page with you and answer any questions you may have. Ultimately, you will be asked to sign several pages of the Petition under oath, swearing that the information provided is true and accurate to the best of your ability, and I will then electronically file your Petition with the Bankruptcy Court.
QUICK TIP: The name of the Bankruptcy game is ‘disclosure.’ You always want to make sure that you report every source of income, every asset and every liability you have because you are signing your Petition under oath and it will be examined by your Chapter 7 Trustee.
This blog is intended to give you preview of the many parts of a typical Chapter 7 Bankruptcy Petition. Please keep in mind that your Petition may differ according to your specific financial circumstances and that it is vitally important to always disclose all of your income, assets and debts (liabilities). Not fully disclosing all of your information could be deemed Bankruptcy Fraud which is a crime.
The first part of your Chapter 7 Bankruptcy Petition consists mainly of identification and general information. It will list your name, address and the last four digits of your social security number. It will give a rough estimate of how many creditors, assets and liabilities you have. It will also include your signature (as the “Debtor”) and mine (as your Attorney), affirming that the information provided is true and accurate. Please note that your Bankruptcy Petition is a public document and due to that fact your Social Security Number will always be redacted to the last four digits for anti-identity theft purposes.
The next several pages of your Petition will be your Means Test, the assessment used to determine if you qualify for a Chapter 7 filing. For more information on your Means Test please consult me directly and/or my previous Blog in this Chapter 7 Series.
Your Means Test will be followed by Exhibit D which is your statement to the Court that you successfully completed your Credit Counseling requirement. Credit Counseling is a mandatory course taken usually on the telephone or internet, which takes about one hour, analyzes your financial circumstances and helps you create a budget. For more information on the Credit Counseling requirement please contact me directly and/or see my previous Blog in this Chapter 7 Series.
The next part of your Chapter 7 Bankruptcy Petition will be a Summary of the Schedules to follow. This is a snap-shot view of your income, assets and liabilities as more fully reported on each individual schedule (described in detail below):
- Schedule AB – Real Property: This Schedule will list any Real Property that may be in your name according to the Land Records with a brief description and its location, along with the nature of your interest in the property (e.g. whether you own it solely or jointly), its current value and the amount of any liens (e.g. mortgages) against the property. This list may also include time shares, if any. Personal Property: This Schedule will also list all of your personal belongings, such as cash, contents of bank accounts and safe deposit boxes, security deposits with public utilities or landlords, clothes, jewelry, antiques, collectibles, firearms, sports equipment, household goods and furnishings, stocks, bonds, retirement accounts, patents, copyrights, or other intellectual property, future interests in any estates or life insurance policies, legal claims against other persons or entities, vehicles and any other personal property not already listed.
- Schedule C – Property Claimed as Exempt: This Schedule will list all of your property that is exempt (or, in other words, protected) from being liquidated by your Chapter 7 Trustees in order to pay back your creditors. It will also list the specific law that provides for each exemption. A typical exemption is for the equity in your car, or home (usually referred to as a “homestead exemption”). Depending on your specific set of financial circumstances, I will determine if it is in your best interests to utilize the State or Federal exemption scheme in order to maximize the protection of your assets under the law. (Check back to this Blog site in the future for an extended explanation of the exemption system.)
- Schedule D – Creditors Holding Secured Claims: This Schedule will list any creditors you have holding a security interest in any of your property. Common examples of such interests are mortgages and car loans.
- Schedule EF – Creditors Holding Unsecured Priority Claims: This Schedule will list any of your creditors that are holding unsecured (for which they do not have a lien) priority claims. These types of claims arise when you have child support obligations, government student loans or tax debt. These types of debts are considered “priority” and take precedence over your other debts. They are usually not discharged in Bankruptcy and you will continue to pay them while your Chapter 7 case is pending. Some exceptions apply, especially with regard to taxes. (Check back to this Blog site in the future for an extended explanation of taxes in bankruptcy.) Creditors Holding Unsecured Non-Priority Claims: This Schedule will list all of your unsecured debt, such as credit cards, personal loans and medical debt. Unless otherwise determined by the Bankruptcy Court, all of the debts listed on this Schedule will be discharged. There will be an ancillary document related to this Schedule called the Verification of the Creditor Matrix. This verification will include a list of your creditors in a matrix format for easy uploading to the Bankruptcy Court.
- Schedule G – Executory Contracts and Unexpired Leases: This Schedule will list all unperformed contracts and leases that you may be subject to. The example I often give for an executory (or unperformed) contract is for snow plowing when it has not yet snowed and/or you have not yet paid the plowman. A lease, for example, for an apartment or a car is an executory contract to the extent that it has not expired.
- Schedule H – Codebtors: This Schedule will list any persons you have become liable with on a debt, other than a spouse in a joint petition. Examples often include parents who have co-signed a loan for a child.
- Schedule I – Current Income of Individual Debtor(s): This Schedule will list all current income you are receiving at the time of the signing of the petition. If you are married, your spouse’s income must be included whether or not your spouse is filing Bankruptcy.
- Schedule J – Current Expenditures of Individual Debtor: This Schedule will list all of your expenses that you will continue paying regardless of ever having filed for Bankruptcy, such as your mortgage, utilities, transportation and food expenses.
At the end of all of the Schedules there will be a “Declaration Concerning Debtor’s Schedules” which you will sign under oath stating that all of the foregoing information contained in the various schedules is true and accurate to the best of your ability.
Next there will be a document called “Statement of Financial Affairs.” This statement will include information about such items as any pending lawsuits you are involved in, a list of the contents any safe deposit boxes, information related to any garnishments you have on your payroll, or businesses you may own or have owned, among other pertinent information.
That statement will be followed by a Disclosure of Compensation of Attorney for Debtor. On this document I will list the amount of money you have paid for my services.
The final document in your Chapter 7 Bankruptcy Petition will be your Form B21, otherwise known as your “Statement of Social Security Number.” This statement is the only non-public part of your Bankruptcy Petition and will only be seen by, you, me and the Bankruptcy Court. It is not a public document and therefore, your entire Social Security Number will be protected against identity theft. This is quite possibility the most important document you will read and sign at the time of filing. In fact, I will require that you re-read this document several times, and even show me your Social Security Card to confirm the accuracy of your Social Security Number. If your social security number is wrong on this form, your debts will not be discharged…but someone else’s may be! So always triple check…and then check again!
After you have read and signed all of the documents you will be given (or sent) a copy of your entire Petition. Afterwards, I will electronically file your Petition. During the e-filing process a Case Number, a Chapter 7 Trustee, and a date for your 341 Meeting will be randomly generated and assigned to your Chapter 7 Bankruptcy Case. I will deliver this information to you by phone or email, and a Notice will be delivered to you by the Bankruptcy Court including this and other pertinent information about your Chapter 7 Bankruptcy Case.
Stay tuned for our next blog entry in this Chapter 7 Series which will explain just who and what the Chapter 7 Trustee is and why the Trustee plays such a vital role in your Chapter 7 Bankruptcy!
For more information, call or text me at 203-713-8877.