Statement of Financial Affairs

Preparing the paperwork for your bankruptcy case can seem tedious or repetitive, but each form is important and gives the court the information to handle your case correctly. Some forms give basic summaries, while others drill down into the exact details to explain to the court what led you to filing bankruptcy.


Why the Statement is Necessary

The court trustee is tasked with evaluating your finances and assessing your property to determine if anything needs to be taken and sold, with the proceeds distributed to your creditors. Most Chapter 7 cases are considered “no asset” but if you have non-exempt property, it may be seized. We’ll use exemptions to protect your property and assets and build a solid case. Your paperwork will include the Statement of Financial Affairs, which summarizes your financial transactions prior to filing. Non-exempt property that was transferred and certain payments to creditors could be collected by the trustee and then used to pay your unsecured debts.

I’ll help you complete this form and will help you to remember all of the necessary details. On this form, you’ll list your income, all of your bank and financial accounts, any payments you’ve made to any creditors (even friends and family members), any financial lawsuits/garnishments/collections/repossessions/foreclosures you’ve dealt with, and any property you’ve given away, transferred, sold, or are holding for someone else. Accuracy is key; if it’s found that any information was omitted, your case could be dismissed, and in some situations, this could also lead to charges of  bankruptcy fraud.  


Filling in the Details

Most items on this form are self-explanatory, but I’ll work with you to clarify anything that’s confusing. You’ll need to list any payments to any creditors over a specified length of time, and you’ll need to differentiate between insiders and regular creditors. Insiders are people you have a relationship with, such as relatives, friends, and business associates, and regular creditors are others such as banks, mortgage companies, credit card companies, and hospitals. Any payment of any amount made to an insider over the last year needs to be included. Payments to regular creditors of $600 or more must be reported if they were made within the 90 days prior to filing, but if the payments were related to business debts, that amount jumps to $6,225.

You’ll also need to report any transfers of property you’ve made in addition to payments. This includes the sale or giving away of real or personal property in the two years leading to bankruptcy, but this does not include gifts. If you’ve transferred something to an irrevocable trust and are listed as the beneficiary, this needs to be reported for the ten years leading to bankruptcy. If you’ve tried working with a debt consolidation or debt counseling service to try to avoid bankruptcy, you may have been charged very high fees. This information must be included on this form, and if the court determines that the fees were unreasonable, the trustee could take these funds back and distribute them to your creditors.  


Trusted for Accuracy

One of the benefits of working with an experienced bankruptcy attorney is that you can trust your paperwork will all be complete with accurate information. I’ll create a customized package of paperwork with only the forms you’ll need. I’ll also review everything before filing your case and will be with you during the 341 meeting.