Many people filing bankruptcy aim to get rid of debt and have a fresh financial start. However, it's a complex process—you must fill out all of the proper forms and attend a court hearing before your bankruptcy is approved. Before you contact an attorney, make sure that you have all of the proper documents gathered to make your bankruptcy go smoothly. When you file chapter 7 or chapter 13 bankruptcy, you'll need proof of income, as well as documents that account for all of your assets.
First, collect financial records that show your income. You will need your W-2s for the past 6 months or a profit and loss statement showing you are self-employed. Longer work history documents are also beneficial. If you have income from sources other than a job, such as disability, social security, or rental properties, you also need to find documentation to prove it.
You also need to show all of your debt. This includes:
An attorney can help you protect some of your assets, even if you still owe money on them. However, you must first show all of your debt. It also helps to obtain a credit report.
The bankruptcy court typically requires that you provide your tax returns or tax transcripts for the previous 2 years. If you did not file your taxes, you will be required to do so before filing for bankruptcy. Sometimes you may be required to provide tax returns for more than 2 years.
If you own real estate, you need to get it appraised and include the documentation in your bankruptcy filing. It doesn't matter whether you still owe money on the real estate or not— this will be accounted for when looking at your debts.
You also need to determine how much your vehicles are worth. Make sure to include your vehicle registration papers, proof of insurance, and any vehicle deeds, if you have them. If you are still making payments on any of your vehicles, you also need to show a loan statement.
If there are any other circumstances that affect your income and debt, you need to be able to show them to the court. For instance, collect documentation for the alimony and child support you pay, as well as any income you receive from these sources.
All of your assets need to be accounted for when filing for bankruptcy. Therefore, you need to print out copies of your retirement accounts and bank statements, even if you don't have much money in either one.
Once you have gathered all of the bankruptcy court documents, consult with a bankruptcy attorney. The process is rarely straightforward, and it helps to have someone on your side. An attorney can help you avoid common mistakes people make when filing for bankruptcy.