People usually fall into one of two categories: detail oriented or big picture thinkers. When filing bankruptcy, it’s important to keep your eye on the big picture and your long-term goal of being debt free, but the process also requires a keen attention to detail and organization, especially when it comes to paperwork. You’ll need to provide documentation for all aspects of your finances for the six months leading up to your bankruptcy, along with many forms. Before we get started, it’s important that you understand some legal terminology that will guide you as you complete the forms.
Debt Categories
Part of my job is to provide you with a comprehensive packet of paperwork that includes only the forms you’ll need. I’ll also guide you as you complete the forms and provide information about your debts. You’ll need to list all of your debts, even if they will not be included in your bankruptcy or you’re unsure if you’re responsible for them. By including debts in your paperwork, you’re not saying that you’ll pay them; this simply gives the court an accurate idea of what you’re dealing with and makes it possible for these debts to be discharged, if applicable.
It’s fairly easy to determine how much you owe on most debts by simply looking at your statement or contacting your creditor. However, some debts can be more complicated, so we’ll work together on this. The type of debt can sometimes determine how much of it you’ll be responsible for. You’ll need to decide if your debt, or claim, is:
- Contingent – You are not the primary borrower on the debt, but may still be responsible for it. An example of this would be if you were a cosigner on a loan and the primary borrower defaulted on the debt.
- Unliquidated – The amount you owe is yet to be determined. This usually happens if you’re part of a lawsuit and you owe money, but the judgement has not yet been made as far as the exact amount owed.
- Disputed – If you and your creditor disagree on the amount you owe, it would be a disputed debt. This most commonly applies to back taxes.
Knowing which categories your debts fall into will not only help us as we complete your paperwork, but will also guide some of the filing decisions we’ll make and exemptions that we’ll use.
Knowing the Facts
All of the new legal terminology you’ll be confronted with as you get a handle on your finances and work toward bankruptcy can be confusing, but you can count on me to keep you informed. I’ll make sure that you have the facts and materials you’ll need to confidently get your case resolved and make a new start.