Fill Out Your Statement Affairs Form

What is the purpose of the Statement of Financial Affairs form?

The Statement of Financial Affairs form is designed to gather detailed financial information from debtors filing for bankruptcy. It captures data about income, assets, debts, and financial transactions that may be relevant to the bankruptcy case. This ensures that the court has a clear understanding of the debtor's financial situation, helping to facilitate the bankruptcy process.

Who needs to complete this form?

Every debtor must complete the Statement of Financial Affairs form. If two spouses are filing a joint petition, they may use a single form for both. However, for those filing under chapter 12 or chapter 13, both spouses must provide information, even if a joint petition is not filed, unless they are separated. Business owners must also include information about their business activities alongside personal finances.

What information is included in the form?

The form contains multiple questions covering various aspects of a debtor's financial affairs. This includes income from employment or business, any other sources of income, payments made to creditors, legal actions involving the debtor, and details about property that has been repossessed or foreclosed on. Debtors must provide accurate figures and explanations as required by the form.

What should I do if I need more space for my answers?

If you find that the space provided on the form is insufficient for your responses, you can attach additional sheets. Make sure to clearly identify these sheets with the case name, case number (if known), and the question number you are answering. This will help keep everything organized and ensure that the court can follow your answers easily.

How do I report income from different sources?

The form provides specific sections where you can report income from various sources. For income related to employment or business, include gross amounts received from the beginning of the calendar year up to the date of filing. You should also report income from the two years prior. If a joint petition is filed, the form requires you to list income separately for each spouse unless otherwise specified.

What if I have made payments to creditors recently?

You'll need to provide details on any payments made to creditors in the 90 days before filing. Include the creditor's name and address, dates of payments, amounts paid, and any amounts still owed. Different rules apply depending on whether your debts are primarily consumer-related or not, so follow the instructions for the appropriate section carefully.

What does the term "insider" mean in the context of this form?

An "insider" refers to individuals or entities closely connected to the debtor. This includes relatives, business partners, and significant shareholders. Understanding who qualifies as an insider is important for accurately reporting financial transactions, especially payments made to them before filing for bankruptcy. This helps maintain transparency in the bankruptcy process.

Completing the Statement of Financial Affairs can be a daunting task for many debtors. Mistakes made during this process can lead to significant complications. Here are five common mistakes to avoid.

One frequent error is failing to provide accurate income information. Debtors must report all income received over the past two years, as well as from the beginning of the calendar year to the date of filing. If individuals fail to include all sources of income or provide estimates rather than actual figures, it may lead to inconsistencies that could raise suspicion or hinder the bankruptcy process. Ensuring that all income is correctly documented is essential.

Another mistake involves disregarding the need for detail in reporting payments made to creditors. Question 3 requires debtors to list all payments made within 90 days prior to filing. Omitting debts or failing to indicate the reason for certain payments can result in problems. Debtors should not overlook indicating any payments made to insiders or provide explanations for why those payments were made.

Many individuals also ignore the importance of timing when completing the form. This form requires careful consideration of transactions and income over specific timeframes. Missing critical deadlines or misreporting the correct time period for income or expenses can create challenges in the proceedings. It's important to ensure that all entries align with the appropriate timelines.

People sometimes make the mistake of not fully understanding their status, particularly regarding business activities. If a debtor has engaged in business activities within the last six years, even as a sole proprietor, they must disclose this on the form. Failure to do so can lead to incomplete information and questions about the debtor’s honesty in the filing process.

Lastly, many debtors overlook the requirement to report the financial situation of both spouses, particularly in joint petitions. Failing to include the necessary details for both parties can result in incomplete filings. Ensuring that information for each spouse is included, whether or not the petition is joint, is crucial for a smooth bankruptcy process.

By avoiding these common mistakes, debtors can facilitate a more efficient and straightforward bankruptcy proceeding. Attention to detail and accuracy are key components of effectively completing the Statement of Financial Affairs.

The Statement of Financial Affairs form is a critical document required during bankruptcy proceedings. While this form captures essential information about a debtor's financial situation, a number of other forms and documents complement it. Each serves a crucial role in providing a comprehensive view of the debtor’s financial standing. Below is a list of commonly used forms that are often filed alongside the Statement of Financial Affairs.

• Voluntary Petition: This is the initial document that officially begins the bankruptcy process. It outlines the type of bankruptcy being filed and provides basic information about the debtor, such as name, address, and the nature of debts.
• Schedule A/B (Real and Personal Property): This form details the debtor's assets, including real estate and personal property. It helps the court understand what the debtor owns and how it may affect the bankruptcy outcome.
• Schedule C (Property Claimed as Exempt): Debtors use this document to declare certain assets they wish to keep. Exemption laws vary by state and determine what property a debtor can retain during bankruptcy.
• Schedule D (Creditors Holding Secured Claims): This form lists creditors that have secured claims against the debtor. By outlining these secured debts, it informs the court of which creditors have collateral backing their loans.
• Schedule E/F (Creditors Holding Unsecured Claims): Debtors list all unsecured debts, such as credit card debt and medical bills, on this schedule. This document is vital for the court to assess the total liabilities of the debtor.
• Means Test Calculation (Official Form 122A): For those filing under Chapter 7, this calculation determines eligibility for this type of bankruptcy. It assesses the debtor's income against the median income for similar households in their state.
• Statement of Intention: This form is used by individual debtors in Chapter 7 cases to notify the court of their intentions regarding personal property that has secured loans, such as cars or furniture.
• Application to Waive Filing Fee: If a debtor cannot afford the filing fees, they may submit this application to request a waiver. Approval allows individuals to bypass these costs during the bankruptcy process.

In conclusion, these additional documents work in tandem with the Statement of Financial Affairs to create a complete picture of the debtor's financial landscape. Properly completing and filing these forms ensures that the bankruptcy process runs smoothly and that the court has all necessary information to make informed decisions regarding the case.

• Debtor's Schedule of Assets and Liabilities: This document provides a comprehensive list of all assets and liabilities of the debtor, similar to the Statement of Financial Affairs in that it details the debtor's financial situation, helping to identify what is owed and what is owned.
• Statement of Monthly Income: This document outlines the debtor's income streams, providing a snapshot of cash flow, aligning with the Statement of Financial Affairs by detailing income sources during a specific period.
• Creditors Matrix: The creditors matrix lists all creditors the debtor owes money to, capturing essential information similar to the way creditors' claims are documented within the Statement of Financial Affairs.
• Chapter 13 Plan: This document outlines how a debtor plans to pay back creditors over time, reflecting the payment strategies mentioned in the Statement of Financial Affairs for those in repayment plans.
• Statement of Intent: This form indicates the debtor's plans regarding secured debts, similar in function to the Statement of Financial Affairs as it shows how debts will be managed moving forward.
• Schedule I (Current Income of Individual Debtor(s)): This document captures the ongoing income of the debtor or debtors, correlating closely with the income inquiries in the Statement of Financial Affairs.
• Schedule J (Current Expenditures of Individual Debtor(s)): This schedule documents monthly expenses, complementing the Statement of Financial Affairs by providing additional context on the debtor's financial obligations.
• Certificate of Credit Counseling: This certificate verifies that the debtor has received required credit counseling, aligning with the broader requirement of full financial disclosure in the Statement of Financial Affairs.
• Statement of Financial Position: Similar to the financial affairs statement, this document provides an overview of the debtor's financial health, detailing assets, liabilities, and equity.
• Proof of Claim: This document is filed by a creditor in a bankruptcy case, providing evidence of their claim against the debtor, which relates to creditor disclosure aspects found in the Statement of Financial Affairs.

When filling out the Statement of Financial Affairs form, it is essential to ensure that the information is accurate and complete. Here are six things to keep in mind regarding what you should and should not do:

• Do provide detailed information: Ensure that every question is answered fully and accurately, including income from all sources.
• Do mark "None" where applicable: If any section of the form does not apply to your situation, make sure to check the box labeled "None."
• Do include both spouses' information: When filing a joint petition, information for both spouses should be combined and clearly documented.
• Don’t leave questions unanswered: Every question must be addressed. If additional space is needed, attach a separate sheet with the proper identification.
• Don’t disclose personal information unnecessarily: Avoid naming minors or providing sensitive personal details that are not required by the form.
• Don’t rush the process: Take your time to review the information provided before submitting the form to prevent potential errors.

By following these guidelines, you can ensure a smoother process when completing your Statement of Financial Affairs. Accuracy and diligence will benefit your situation in the long run.

1. The Statement of Financial Affairs is only for individuals with a joint petition. This is incorrect. While spouses may file a combined statement if they submit a joint petition, every debtor, whether filing individually or jointly, must complete this form.

2. Only business owners need to fill out the Statement of Financial Affairs. In reality, both individual debtors and those who have been in business must complete this statement. The instructions clarify that all debtors, regardless of their business status, must provide detailed financial information.

3. If a question does not apply to me, I can leave it blank. This misconception is unfounded. If the answer to a question is "None," the debtor must mark the designated box labeled "None" to indicate that the question does not apply.

4. I must provide the full names of my minor children. The rules state that the full names of minor children should not be disclosed on this form. Instead, debtors must use the child’s initials and include the parent or guardian’s name to protect the child's privacy.

5. Debtors can ignore the last two years of income. That is not accurate. The form requires debtors to report income for the two years before filing for bankruptcy. This helps create a comprehensive financial picture.

6. All creditors must be listed, including those I have repaid recently. While all creditors should be reported, the form specifically stipulates that any payments to creditors made within 90 days before the case is filed must be detailed. This applies only if the payments exceed certain amounts based on the type of debtor.

7. I can submit my answers without additional documentation. Additional documentation may be necessary if the space provided is insufficient. Debt collectors or courts might require extra information, which should be clearly identified with the case name and number along with the question it refers to.

Filling out the Statement of Financial Affairs form is an important step for anyone in the bankruptcy process. Here are some key takeaways to help you navigate this form effectively:

• Comprehensive Information Required: This form requires you to provide detailed financial information, including income, debts, and any relevant legal actions.
• Knowing When to Combine Filings: If you and your spouse are filing together, you can submit a single statement that combines both of your information.
• All Income Counts: You must report all sources of income, not just from a job or business. Be thorough in reporting every aspect of your earnings.
• Labels Matter: If you are making payments or transfers to minor children, use their initials instead of their names for privacy reasons.
• Understanding "In Business": Know that the term “in business” applies not just to corporations but to individuals who have acted as sole proprietors or partners as well.
• Use of Additional Space: If the provided space isn’t enough for your responses, feel free to attach a separate sheet detailing the case name, number, and question number.
• Documenting Transfers: Be meticulous in reporting payments to creditors, especially those that were made within the last 90 days before filing.
• Don’t Forget Insider Payments: If you’ve made any payments to insiders within the last year, those also need to be itemized clearly.
• Keeping Legal Matters in Mind: If you’ve been involved in any legal proceedings, list them as required by the form, including details about the case.
• Repossessions and Foreclosures: Remember to account for any property that has been repossessed or foreclosed on within the past year.

Taking the time to fill out this form carefully can ease your path through the bankruptcy process. Accuracy and thoroughness are your best friends here.