If there is one certainty in life, it’s that nothing is certain. Although lately, there seems to be some inevitable certainties in life. The old adage about death and taxes still seems to hold true. If you are rich enough though, you might be able to buy an island and make it your own country, or you could buy a yacht and live every day in international waters. That would get you close to escaping taxes.
The death thing hasn’t quite been figured out yet, at least not by humankind as we know it. But there’s at least (if science fiction is to be trusted) the remote possibility of uploading your mind to some sort of neural network and staying alive digitally. Of course, that mind-program could then be downloaded to some kind of cybernetic android/humanoid and then maybe – just maybe – you could live forever, or at least until your software crashes as it most inevitably does.
But you may have noticed I used the word “lately.” Now lately is a terrific Stevie Wonder song. More than that (or less than that depending on your perspective), lately there seems to be some inevitable certainties. For example, if you take yourself to the library to get something accomplished – say for example writing a blog for a bankruptcy-related website – someone (often the librarian) will be speaking at a volume far too loud for the sawmill, let alone the library. Gone are the days when Marian the Librarian would angrily shush the loud, obnoxious teenagers in the library for the least bit of sound they made. Even the shifting of a wooden chair was too much sound for her. Marian had no need to shush the adults, since adults had the now uncommonly common sense not to make a peep in the library. This was likely the result of a succession of Marians who had laid down the law on those not so bratty adults as bratty children long ago.
Now, however, there are no Marians. The librarians themselves are complicit. After all, a shushing librarian might stifle the creativity of a middle-aged, near do well, who is busy frittering away his remaining years (and our remaining, precious supply of oxygen), in the worthless endeavor of biding his time by playing video games on the free, public Wi-Fi there. If this sounds a bit too misanthropic for you, try writing something insightful while listening to the braying and cackling during his enjoyment of watching plants defend themselves against zombies. And yes, the irony isn’t lost that this same vessel of sound and fury signifying nothing has supplied useful fodder to the writer.
Here’s another inevitability in life – someone who tries to define “irony” will display their lack of understanding of the definition of irony which seems to suggest that the entire situation is ironic, although I hesitate to define it as such because in so doing, I’ll become a paradox about irony – maybe.
And Now – The Punchline
All of this long-winded nonsense leads us to the topic at hand. In the world of bankruptcy, if you are considering filing, there’s an inevitability – you will have to demonstrate every, single aspect of your financial life to your attorney, and therefore, the court. There is no getting around this fact. The only attorney who would tolerate otherwise would be an incompetent attorney. And we can assume no one would considering filing for bankruptcy using an incompetent attorney.
Small Showers Last Long, But Sudden Storms Are Short
You shouldn’t be lied to. So we won’t pull any punches. Filing for bankruptcy will be a whirlwind of paperwork and the thorough gathering of still other paperwork. But it will be short (but not so sweet). Although there is sweetness that lies in the end of it all. That light at the end of the tunnel is the elimination of tens of thousands of dollars’ worth of unsecured debt. Not to mention the power to stop foreclosure and repossession. It’s a mighty axe you wield when you file for bankruptcy, so wield it carefully. The axe itself is only mighty when you choose to swing it artfully. You can only wield this powerful tool effectively if you choose to delve deep into your financial past. You must be thorough – oh powerful one.
With Eager Feeding Food Doth Choke the Feeder
So what the heck do I need to give to my attorney in Arizona anyway?
If you’re out there in the hills of Scottsdale, the flatlands of Mesa, Tempe, and Chandler, or right smack dab in the heart of downtown Phoenix, you’ve got to supply certain documents to your attorney for him or her to analyze and then pass along to the bankruptcy court. Rumor has it that that the pathway right off the 101, from Glendale to Peoria faces the same thing. And word on the street is even in Surprise and Ahwatukee, you’ve got the same rules. The fabulous fountain of Fountain hills and the serene sunsets of Surprise see the same scene. Get the picture?
Some things are better piled on. For example, piles of cheese on a cheese sandwich. How about fresh powder on top of some snowpack? What about stacks of 100-dollar bills? Those are all things we want stacked up high and piled on.
When you file for bankruptcy, your attorney is going to pile on the paperwork. Now if he or she is worth what you are paying, he or she will help you organize and even complete a lot of what is needed for your case. But they surely aren’t going to come to your house and rifle through your mountains of old paperwork just to find what is needed. So here’s a list of the kinds of documents you’ll likely need for your bankruptcy. Your attorney is going to look at it, your bankruptcy trustee is going to review it, and a bankruptcy judge might even take a gander at it. You better get it ALL together. This isn’t the time to get lazy. You should also keep in mind that this is the minimum that is required of you. There’s a good chance somebody we’ve already mentioned will want even more documentation. But if your lucky, the list that follows is enough to get the job done.
Your income taxes from the last two years will always be required. If you’ve got a business, you’ll need to include taxes that are related to business operations as well, like payroll tax. If you haven’t filed taxes, you better get on it. All of your taxes have to at least be filed shortly after your bankruptcy case is filed. To avoid getting your case dismissed, it’s best to file your taxes before the filing of your bankruptcy case. It’s just the safe way to approach it to avoid any issues of timeliness.
What exactly needs to be provided?
Your complete tax forms are ideal, but not everyone has the wherewithal to have these available. You can order a tax transcript from your state and federal taxing authorities. This is a summary of all of your tax details condensed onto a few pieces of paper. It’s official, and it’s proof enough of your tax record.
If you’re one of those people who are filing taxes from previous years right before filing for bankruptcy – here’s a trick. You can file your taxes at the actual IRS and state tax offices. They will give you stamped proof that you’ve at least filed your taxes. This way your bankruptcy trustee will know that your taxes have been officially filed and he or she won’t move forward with trying to dismiss your case for lack of filing your taxes.
Banks statements are a must. You’ll need to supply copies from every single account you have, whether it’s a savings or checking account. Six months’ worth is a good rule of thumb. Use the date of filing your case and work backwards six months.
What’s going on with my bank statements?
Your bankruptcy trustee is going to be combing through those statements in detail to make sure you aren’t trying to hide cash somewhere or pay off debts that you aren’t allowed to pay off prior to filing. If your bank statements involve money going in and out in a typical pattern with your spending being applied to usual expenses, you aren’t going to have any issues. But if you withdraw three grand and have no way to show what you did with it (duh – receipts) then you are going to be in trouble with your bankruptcy trustee. You might end up paying that money to the court so it can be distributed to your creditors.
Income is very important when it comes to bankruptcy. There are restrictions on how much money you can make and qualify for chapter 7, which is the chapter most people are striving to file. One sure way to analyze whether you qualify is a detailed review of your paystubs. You’ll want to provide at least two months’ worth. Oftentimes six months are required.
What if you don’t have paystubs?
Retired people often provided a social security statement or a statement about a pension. If you are self-employed, you may still have to supplement your taxes with more recent proof of your current income. A profit and loss statement might be required to accomplish this.
The court is expecting you to do your due diligence to provide all of your current debts. A credit report is invaluable for this purpose, but your attorney may order this for you. You’ll want to ask your attorney if you’ll need to supply this or not. You’ll also want to provide any recent bills you have received in the mail. These may not be on your credit report, so recent documentation is the only way to ensure this information is available.
If you work hard to provide recent bills and a credit report, you’ve done what the court asks for. If something comes out of the woodwork after filing and there was no reasonable way to know it existed when you filed, you are typically allowed to add it to your case (as long as the debt occurred prior to filing).
Mortgage Statement/ Car Loan Statement
Your attorney is probably going to want a mortgage statement from you. Don’t panic. No mortgage – no statement needed. That’s the way it goes with everything on this list. Believe it or not, some people actually think that if they don’t have a bank account, they don’t get to file for bankruptcy. Others worry if they don’t have check stubs because they are retired, they don’t get to file.
Come on people. You bring things in IF (that’s a big if, isn’t it?) it’s applicable. If not, don’t bring it into the office. It’s not going to stop you from filing. And if you don’t know what applicable means, look it up.
In case you are wondering why your attorney needs your mortgage statement, he or she is looking at two main things. First, whether you are current or behind on your mortgage will have a big effect on how your case is handled. Second, you are only allowed to protect a certain amount of equity in your home when you file. Your attorney is going to compare what you owe on your mortgage versus what your home is worth to ensure the entire value is protected.
You’ll need to bring in a statement about any car loans you have. The issues with vehicles are basically the same as they are with a home. Your home equity and the status of your payments being current or behind are both factors affecting how your case is dealt with.
IRA/401K or Other Retirement Accounts and Life Insurance
Different forms of retirement and life insurance are treated differently. Therefore, whatever statements you have you should provide to your attorney. This can also have a big effect on how your cases is handled.
You Don’t Have to Go Home, but You Can’t Stay Here
This list does not include absolutely everything you need. If you’re attorney doesn’t ask for more than this, then consider yourself lucky. It’s important to keep in mind that there may be other items of info needed that aren’t on this list. Don’t get mad at the list if your attorney asks for more. We’ve done our best here, but every bankruptcy case is different. Therefore, every list of what’s needed is also different.
For the Finale
If you are reading this, bless you. Any writer hopes to have at least some kind of audience. Even the writer of a diary secretly hopes that some unknown admirer is out there who will one day discover the contents and become instantly enamored with that writer. Alas, this blog is much the same. It is written for a wide audience (albeit a bankruptcy audience) to partake of and enjoy. In reality, this blog is more of a message in a bottle cast into the sea, with the hopes that some unknown audience in a far-off land lies in wait for it to wash ashore – only to embrace it with admiration, adoration, and perhaps a bit of speculation as to who would choose to write such scintillating stories. It’s not Shakespeare. It’s not even close to Shakespeare, but it’s at least a bit more than USA Today.