When a debtor seeks bankruptcy protection from the bankruptcy court, there is a duty to submit documentation of your assets, liabilities, income sources and expenses. Your eligibility to seek a Chapter 7 discharge will depend on your household income and whether you are at or below the median household income. To determine if your income level will allow you to successfully seek a discharge, we ask our clients to provide us with the following documentation:
- Your last six (6) months of payroll advices or paystubs.
- Documentation of any Social Security, disability, pension or annuity income.
- Your tax returns, both Federal and state, personal and business, for the last two years, along with W-2 or 1099 income verification.
- Documentation of any money paid or contributed to your household expenses by friends or family.
- Any other income coming into your household from any source.
We also need to determine if you own any assets that might be non-exempt. There are several exemptions under Virginia law that protect certain kinds of property form being taken form you to pay your creditors. Social Security benefits are exempt, as are veteran’s disability benefits, and there are other exemptions that may apply. Your cars are exempt up to $6,000.00 in value per householder, but we need title information, Kelly Blue Book private-party sale valuation, and a pay-off on car loans. In Chapter 13 cases we would also need to have a copy of the current auto insurance.
Real estate will need to be documented with copies of the deed, any deeds of trust, home value and mortgage payoff information. It is of the greatest importance that we are able to determine the true fair market value of any real estate so that we can hopefully protect your right to keep the house. A significant amount of equity in real estate could result in the Chapter 7 Trustee trying to sell the real estate to raise money to pay your creditors (and generating a nice fee for himself!). If there is any question of the house being worth more that what you owe, we recommend having a real estate professional prepare a Comparative Market Analysis of the home so that we would have an accurate estimate of the real-world value of the home.
We would also need copies of any retirement account statements, life insurance policies (even those with no cash value), or brokerage account statements.
If you have your own business, we will need monthly profit and loss statements for the past year.
If you have education savings accounts, such as 529 plans, wee will need documentation of these accounts, even though they are generally exempt.
If you are divorced, or in the process of divorcing, we will need copies of any divorce decree, divorce settlement, property settlement agreement, as well as documentation of any support orders.
Providing your bankruptcy lawyer with accurate and complete documentation will help insure a favorable outcome in your bankruptcy case, with no surprises!