Bankruptcy Statement Mandated by Congress
NOTICE PURSUANT TO 11 USC 527(B) TO CLIENTS WHO CONSIDER FILING BANKRUPTCY
This Notice requirement was imposed by Congress in 2005 after intense lobbying by the credit industry. In my opinion, these statements are designed to intimidate people who need debt relief under the Bankruptcy Code, based on the false assumption that debtors are dishonest. You are entitled to bankruptcy relief so long as you are honest and meet eligibility requirements. My office can guide you through all the requirements of filing bankruptcy so long as you provide us complete and accurate information.
Please take special note of the following:
1. All information that you are required to provide with your bankruptcy petition and thereafter in your case is required to be complete, accurate, and truthful.
2. All your assets and all your liabilities are required to be completely and accurately disclosed in the documents filed to commence your case.
3. The value of each asset must be stated as the replacement value of the asset after reasonable inquiry to establish such value, which means the price a retail merchant would charge for property of that kind considering the age and condition of the property without deduction for costs of sale or marketing.
4. You are required to state your current monthly income. Current monthly income is the average of your income from all sources over the preceding six calendar months, excluding Social Security.
5. In a case under Chapter 13 you are required to calculate your disposable income determined in accordance with section 707(b)(2) of the Bankruptcy Code, i.e. the difference between your total net monthly income and your living expenses.
6. Information that you provide during your case may be audited. Your failure to provide any information may result in dismissal of your case or other sanctions, including criminal sanctions.
DEBT COUNSELING REQUIREMENT
You are not eligible to file bankruptcy unless you receive an individual or group briefing from an approved nonprofit budget counseling agency. That briefing must outline your opportunities for available credit counseling and assist you in performing a related budget analysis and must occur within 180 days prior to filing your bankruptcy. It can take place on the internet or by telephone. If you want our assistance we will help you make arrangements for the required budget counseling.
IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES
If you decide to seek bankruptcy relief you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.
Before filing for bankruptcy, you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief would be most beneficial to you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules, and a Statement of Financial Affairs must be prepared correctly and filed with the bankruptcy court, and you must pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required first meeting of creditors where you will be questioned by a court official called a “trustee” and by creditors.
If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor may not coerce you into reaffirming any debt. If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help preparing your chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy judge. Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.
INSTRUCTIONS ON PROVIDING INFORMATION REQUIRED BY BANKRUPTCY LAW
We must make diligent inquiry of you so as to obtain information to include in your petition. Please carefully read and follow these instructions:
1. You must list ALL your property, and value all of it with its replacement value as defined above.
2. You must list all your debts:
a) You must list debts that will not be discharged, such as student loans and child support.
b) You must list debts that you intend to pay.
c) You must list debts that you cosigned for someone else or that someone else cosigned for you.
d) You must list debts to family members.
3. In determining the amount you owe each creditor, list the amount on your most current statement or correspondence from the creditor.
4. If a creditor is still communicating with you, use the address supplied by the creditor in at least 2 communications over the last 90 days. Do not use the address to which you send your payments, use the correspondence address. Keep all mailings from your creditor, so we can keep up with any changes in the creditorsï¿½ addresses and prove, if necessary, that we used the appropriate addresses.
5. List the account number, if any, for each debt.
You must provide the following documents or information with your petition, or while your case is pending.
1. Copies of all pay stubs, payment advices, or other evidence of payment received within 60 days before the date of filing of the petition by you from any employer
2. A statement of the amount of monthly net income itemized to show how the amount is calculated.
3. A statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition.
4. a. A certificate from an approved nonprofit budget and credit counseling agency describing the individual or group briefing received by you.
b. A copy of any debt repayment plan developed during this briefing.
5. A record of any interest you have in an educational savings account or a state tuition program.
6. A copy of your federal income tax return, or a transcript of the return, for the most recent year ending immediately before we file your case and for which you filed the return.
7. If the court or any party to your case requests it, you must file with the court:
a. A copy of each federal income tax return, or transcript of the return, required for each year while your case is pending at the same time as it is filed with the IRS.
b. A copy of each federal income tax return that had not been filed with the IRS when your case was filed and that you subsequently file for the three years preceding the date that we file your case.
c. A copy of each amendment to any federal income tax return or a transcript of each amendment filed with the court pursuant to paragraph (a) and (b).
8. a. In a Chapter 13 case, at certain intervals, you must provide a statement, under penalty of perjury, of your income and expenditures during the previous tax year, and of your monthly income. This statement must show how income, expenditure, and monthly income are calculated.
b. The statement set out above must disclose the amount and sources of your income, the identity of any person responsible with you for the support of your dependents, and the identity of any person who contributes income or support to the household in which you reside.
9. A document that establishes your identity, including a driver’s license, or such other document containing your photograph, or other personal identification establishing your identity.
Bankruptcy requires complete disclosure of your financial situation: all debts, assets, income, and expenses must be listed. If you should choose to make an appointment with me to review how bankruptcy relief may assist you, bear in mind this requirement of honesty with the court. Bankruptcy relief can provide a fresh start for the honest but unfortunate debtor, but the penalties for failing to disclose all pertinent information to the court can be harsh.