Getting Financial Information Ready for Bankruptcy
Before you start preparing any forms, you will need to gather information about your finances. You should already have most, if not all, of the information you need. Your petition for bankruptcy consists mostly of describing your financial situation at a certain point in time. You need to gather all of your papers regarding your income, monthly expenses, assets, and debts.
There are also certain papers you will be required to file along with your bankruptcy petition. These are your federal income tax return for the last year, and either a recent paystub or some other proof of income. If you did not file a tax return for the last year, you will need to do so before you can file your petition.
For most people, income information will come from three primary sources: paystubs, tax returns, and W-2 statements. Your pay stub should give the most current information. Look for a space that shows your year-to-date (YTD) income. This will give your total earnings since the beginning of the current year. You can then count the number of weeks that have passed since January 1 and divide your year-to-date earnings by the number of weeks that have passed to get an average weekly amount. If your pay stub does not show a year-to-date figure, you can always add up the totals of all pay stubs since the beginning of the year.
If you have additional income from things such as bank account interest, stock dividends, or spousal support, get out any statements or other records that show this income.
If you have income from self-employment, you should gather your accounting records and tax returns.
Get out any papers or records showing the amount of your monthly expenses. These should include housing, utilities, food, loans, and other debts. Expenses are limited by certain IRS guidelines, but you should still know your actual expenses. This should include at least the following categories:
- Housing. If you have a mortgage, you probably have a payment book that shows your monthly payment. If you rent, you should have a copy of a lease that shows the monthly rent, or at least cancelled checks or receipts. If you cannot find any of these, ask your mortgage company or landlord to send you a statement to verify the amount of your payment.
- Utilities. Get out your monthly statements for your electric, gas, cell phone, internet, trash pick-up, and any other utility bill. You could also write to the utility company and ask for a month-by-month statement for the past year. This information may be on some of your bills.
- Food. Since most people do not keep their sales receipts for food, this documentation will not be as easy to find. However, if you normally write a check for your food shopping, you can get an average from your checkbook information. If you cannot find any such information, you probably still have a good idea of how much you spend on food for a week or month.
- Loan Payments. Loan information should be easy to find in the form of a monthly statement or payment book. For credit cards, you should get a monthly billing statement, which will give the balance owed and the minimum monthly payment. For other debts, such as auto loans, you will probably have a payment book.
- Other Debts. Other debts include such things as insurance premiums, gas and maintenance expenses for your car, child day care, and any other expenses. Some of these items will have some sort of documentation and some you will simply have to estimate.
Next, you need to make a list of everything you own. Your list will include items such as real estate, vehicles, bank accounts, financial assets, jewelry, and other personal belongings.
Real Estate. A deed or mortgage will sufficiently describe the property, by way of a legal description. You will probably only need the street address, but it is a good idea to have the legal description on hand.
Vehicles. You will need the year, make, and model of each vehicle you own. You probably already know this information, but it is a good idea to have some paperwork on hand, such as the title, bill of sale, registration, or loan papers.
Bank Accounts, CDs, etc. You will need copies of your most current statements, or some other records, showing the current balance in all checking and savings accounts, certificates of deposit (CDs), IRA accounts, etc.
Other Financial Assets. Other financial assets include such things as stocks and bonds, mutual funds, annuities, life insurance policies with a cash value, and any kind of retirement account or fund. All of these things should have some kind of statement or other paperwork to show current values.
Jewelry and Other Collectibles. These items will probably not have any papers to document their value, unless you had the item appraised or insured for a certain amount, or have borrowed money to buy the item( or you still have the receipt for an item that has not increased in value since its purchase). If there is no documentation, list the items and estimate what you could sell them for.
Other Personal Belongings. This category includes all of your furniture, clothing, pots and pans, dishes, and other everyday personal possessions. Of course, if any of these items are especially valuable, you need to treat them the same as jewelry and collectibles. Otherwise, just make a note in each category with an amount you think it would cost to replace the entire category. It is not necessary for you to list each piece of clothing or each pan separately.
The most common debts are a mortgage, auto loan, and credit cards. A debt will have an outstanding balance, and possibly an interest rate. This distinguishes debts from other monthly obligations, such as rent and utility payments. There will also be either a monthly statement or payment book, and probably some other paperwork you completed or received when you first obtained the credit. Mainly, you will need to know the name and address of the person or company the money is owed to, the account number, and the amount owed.