When you file for bankruptcy, you’re seeking relief from your debts, but you’re also declaring and disclosing all your assets, liabilities and income. You must submit your petition and complete 10 different schedules, a complete statement of financial affairs and calculate a means test. The purpose of the means test is to see whether or not you can file a chapter 7 bankruptcy.
Your petition will ask for your name, social security, address and other general information including whether you’ve filed for bankruptcy before.
Schedule A/B is reserved for all property you own, including legal interests in property such as a family trust, and you’re required to assign a value. Usually, you will value your property based on what you think its worth. Schedule C is reserved for exemptions or where you get to apply the law to protect your property listed in Schedule A/B. Schedules D, E and F are reserved for your creditors. Specifically, Schedule D is for secured creditors, such as your mortgage lender or car lender; Schedule E is for priority creditors such as the IRS; and Schedule F is for unsecured creditors such as your credit cards and medical bills. Schedule G is where you declare any contracts you’re obligated under or leases, for example a car lease. Schedule H is where you list any co-debtors to any debt. Schedules I and J are reserved for income and expenses and to see if there is, if any, disposable income.
The Statement of Financial Affairs or SOFA, is to inform the courts of your financial situation so that they may get a sense of why you’re seeking a bankruptcy. Under SOFA, you’ll have to answer questions ranging from income over the last 3 years, transactions to any family members, lawsuits, property you’re holding for someone else and other financial questions.
It’s very important to complete all schedules, SOFA and your means test. Even though you may complete these items yourself, it is more important that you seek legal advice and hire an attorney to assist you with this process.
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So, if you’re thinking of filing for bankruptcy, and or if you have questions or are ready to get your life back, reach out to Minnesota’s nicest bankruptcy law firm by going to www.lifebacklaw.com. You won’t regret it!