Getting Started
Bankruptcy Information & Documentation Needed from Prospective Clients
All prospective new clients either coming in for an in person consultation
or who are preparing to have a telephone or virtual zoom consultation
should either have the following information and documents at their meeting
or provide the documentation to Mr. Alster prior to their telephone or
virtual zoom consultation. In this way Mr. Alster should be able to provide
definite answers to all questions from prospective client(s) at or before
the conclusion of their consultation concerning their qualification for
Chapter 7 or
Chapter 13 protection, and so that the consultation can proceed as quickly and smoothly
as possible.
LAST SIX (6) MONTHS GROSS MONTHLY HOUSEHOLD INCOME & PROJECTED NET
MONTHLY INCOME: When filing for bankruptcy protection, debtor(s) must provide proof of
all gross income (from every source) as well as proof of all payroll deductions
or self-withholding deductions (if self-employed) for the six (6) months
preceding the month that the debtor(s) file their bankruptcy petition.
When both spouses are living together, we need this proof of the last
six (6) months of gross income and all deductions for the debtor and their
spouses, regardless of whether an individual or joint petition (husband
and wife) is going to be filed; this documentation must be provided to
the Chapter 7 or Chapter 13 Trustee shortly after the case is filed.
For salaried employees, prospective clients/debtors should simply bring
in all of their paystubs for the six-month period described above, known
as the “means test period”. If prospective clients/debtors cannot bring in all of their paystubs
or other documentation indicating their full gross income and payroll
and/or self-withholding deductions prior to or at their in person consultation;
clients should at least provide the information to Mr. Alster by way of
representative paystubs for the
means period (the previous 6 months), and a paystub that would represent their projected
monthly gross income and deductions from gross income going forward (these
may, of course, be represented by the same or different paystubs).
It is helpful for debtor(s) to review
Schedule - I prior to their initial consultation, which schedule represents debtor(s)
testimony as to their projected average monthly income as of the date
their projected bankruptcy petition is filed.
If the debtor is separated/ estranged from (not living with) with his /her
spouse, the debtor need only provide proof of gross income and all payroll
or self-withholding (if self-employed) deductions for himself/herself.
AVERAGE MONTHLY EXPENSES: It is helpful for all potential clients to fill out and bring or provide
earlier the attached
Schedule J to their consultation, which is an itemized list of the debtor(s) and
debtor(s) immediate family’s average, projected, monthly household
living expenses. This should include all actual, projected, monthly household
expenses being paid by the debtors, as well as the debtors’ family’s
reasonable needs, even if debtor(s) have been and/or are unable to provide for same.
CURRENT AND PAST ANNUAL GROSS INCOME: All debtor(s) must indicate the gross income earned during the last two
(2) calendar years and for the current calendar year to date in their
Chapter 7 and/or or Chapter 13 petition. Copies of debtor(s) two (2) most
recent tax returns, W-2(s) and/or 1099(s), along with their most recent
pay stubs would have this information. Debtor(s) should also provide copies
of their 2 most recently filed federal and state income tax returns, either
at the time of their consultation or prior to their petition is filed
as same will likely have to by Mr. Alster to the Trustee appointed by
the Court. Every debtor filing for bankruptcy protection must certify
in their bankruptcy petition that they have filed their last 4 federal
and state tax returns or must be able to provide a reason why they were
not required to do so open (they made insufficient income…).
REAL ESTATE: For all debtor(s) who own or owned real estate or any other significant
assets within the last two years, it is absolutely necessary for the prospective
client(s) to know the approximate fair market value (hereinafter “FMV”)
of the real estate or other significant asset(s) (such as a business,
luxury vehicle etc.), as well as the payoff amounts of all/any mortgage
or other liens (such as Judgment or tax liens…) filed against the
Property. In this way, Mr. Alster can determine how much positive or negative
equity, (negative equity is when the lien amount or amount owed to a secured
creditor is greater than the FMV of the asset), the prospective client/debtor
has in the asset.
Often times the only significant asset that prospective client(s) own is
their residence; all of the documentation referred to below is not required
until or shortly after the bankruptcy petition is filed, however, prospective
client(s) should do their best to bring in the following documents for
each parcel of real estate to their consultation, as it is always helpful:
- The most recent appraisal, performed on the property (preferably less than
1 years old). If prospective client(s) do not have a recent appraisal,
a real estate broker's price opinion (also known as a "BPO")
may also suffice; a BPO is simply a letter from a realtor, whereat the
realtor gives their opinion as to the FMV, or the average range of the
FMV, of the subject real estate. Most Trustee's will not accept real
estate tax bills or assessments as proof of the FMV for the subject property,
as such prospective client(s) should not base their opinion as to the
FMV of their real estate solely on a municipal tax assessment.
- If the property was bought or sold within the last two (2) years, a copy
of HUD-1 settlement sheet also known as the RESPA indicating where and
how the mortgage proceeds from the sale of the property were spent in/or applied;
- Payoff statements for all open mortgages, indicating the total amount owed
to pay off the mortgage and, often separate from this, the amount owed
for all/any mortgage arrearages (past due amounts owed) for each mortgage
lien, as well as for any other lien(s) against the property.
- Proof of ownership, which includes copies of all deeds through which prospective
client(s) took title to the property.
LAWSUITS: Copies of the filed complaint/lawsuit served on the debtor, and the judgment
(if entered), and the most recent document either filed with the Court
where the debtor is being sued or served on the debtor, such as a wage
executions or other post-judgment motion (such as a levy filed against
the debtor’s assets, writ of execution…).
CREDITORS: The identity/names, addresses, account numbers and, at least, approximate
balances owed to all unsecured and secured creditors, (secured creditors
include, but are not limited to, mortgage loans, leases, tax liens, automobile
loans and mortgages), is required to be included in the debtors’
bankruptcy petition so that the debtors’ creditors are properly
notified at their correct addresses about the petition being filed. If
a debtors’ creditor is not properly identified in the petition,
the underlying debt owed to the creditor may not be discharged along with
the debtors’ other creditors when the debtor receives his/her discharge
order at the successful conclusion of their case.
If retained, Mr. Alster's office will order, at no charge to clients,
a report called a CIN, which contains a summary of all of the debtors'
information concerning their creditors and lawsuits in the debtors'
credit reports on file with the 3 national credit reporting bureaus, Trans
Union, Equifax and Experian. While the CIN ordered by our office is often
perfect, there are some creditors who do not report to the 3 said credit
reporting bureaus, or who are supposed to report to the reporting bureaus
but fail to do so; if this occurs, it will be necessary for all prospective
clients to provide the proper identities of all such creditors, if any,
not included in the CIN, as well as any collection agencies retained by
their creditors who may not have been not included in the CIN ordered
by our office. Since the CIN will not be ordered until the client retains
our office, it is important that all prospective clients know the identities
of and the approximate amounts owed to all of their creditors when the
clients come in for or attends their initial consultations.
Please note that all of the credit reporting agencies must offer one (1)
free credit report to consumers every 12 months. One site that you can
visit to procure this free credit report from each of the 3 national credit
reporting bureaus is:
www.annualcreditreport.com.
Following are the links to the reporting agencies actual websites.
FINANCIAL ACCOUNTS/ASSETS: Names, account numbers and balances of all financial accounts, including,
but not limited to, checking, savings, stock brokerage and retirement
accounts. Information on all financial accounts closed during the last
twelve (12) months should be provided in must be listed in the debtor’s
petition, including the address, account number and amounts on the last
statement before the account was closed.
Call or
contact us today to get on the road toward getting a “A fresh Start”.