The average filer has lot to learn about the bankruptcy process. With so many requirements and steps, it is easy for some detail to slip through the cracks, which can delay the outcome or even lead to a dismissal of the case. Before you file for bankruptcy, make sure you are prepared and have planned accordingly.
The first piece of information that is required in a bankruptcy filing is the petition, which lists all of your assets, debts and gives an overview of your financial standing. This includes information about your financial and credit history, your current account balances and details about your banking transactions. In fact, one of the biggest mistakes people make prior to filing for bankruptcy is failing to organize their finances and keep transactions to a minimum.
In some cases, people may attempt to transfer assets to friends or family members or give monetary “gifts”, which they later intend on taking back. On the other hand, people may attempt to purchase more items prior to bankruptcy in attempt to obtain these goods before the debts are erased, essentially getting these items for free. These actions are considered fraudulent in the eyes of the bankruptcy court, which can lead to having your case dismissed and the pursuit of legal action. In general the court will consider the following to be fraudulent:
- Withholding information about your assets or debts
- Transferring assets to friends or family members prior to filing for bankruptcy
- Purchasing $550 or more on a credit card within 90 days of filing for bankruptcy
- Taking a cash advance of $825 or more from a credit card within 70 days of filing for bankruptcy
The bankruptcy court requires many forms that document your financial situation. The best way to prepare for a bankruptcy filing is to organize these documents ahead of time. Submitting the necessary paperwork along with your petition can expedite your bankruptcy process. The court will require the following information:
- Paycheck stubs from the 12 months
- Bank statements from the last 12 months
- Retirement or investment account statements from the last 12 to 24 months
- Tax returns from the previous 2-5 years
- Statements from your debt accounts
- Loan information for a mortgage or car