BANKRUPTCY CHECKLIST
The Client(s), acknowledge, and state under oath, that I/they have been informed of the following information, and have responded to the attorney that there is a complete understanding of each of the following paragraphs and indicate that there are no problems or issues with regard to these matters by placing his/her initials next to each of the numbered paragraphs and signing at the end. If this is a joint filing, both clients must initial and sign at the end.
The answer to most of the bankruptcy questions that clients ask is “you have to list all of your assets and all of your debts”. However, for many people all, or almost all, of their assets are exempt. An exempt asset is an asset that you are allowed to keep.
____/____1.Bank account assets, other than I.R.A. accounts, are not exempt. Therefore, at the time of the filing of the petition, I shall have no funds in any bank account (s) other than potentially a nominal sum (less than $10.00) as I realize that I would likely be compelled to pay and lose the amount of money in my account(s) to the bankruptcy estate, and I know that outstanding checks do not reduce the account balance(s). I also know that I cannot simply withdraw the money from the account, file the bankruptcy petition, and then replace the same funds, as cash is also not exempt, as set forth below. If I do not have a bank account or if my bank account statements do not show how I pay my home mortgage or rent, utilities or auto payments or other expenses, then I may be required to provide legible copies of receipts supporting the payments.
____/____2.I am required to submit to the attorney, and he will send a copy to the Trustee, Court and even my creditors, a copy of my bank statement(s) showing my account balance(s) on the date of filing and bank statements for the 4 months prior to the date of filing. You should provide those statements to the attorney’s office. You may be required to explain any large deposits, withdraws or other debits. The attorney also must receive a copy of your invoices or billing statements for the four months covering and preceding the bankruptcy petition filing and the last three years of your signed income tax returns, with all of the schedules and W-2 forms (more years for chapter 13 cases)(IRS records can be obtained by calling (866) 860-4259). The Trustee will also probably want a copy of the next tax return you file for the reasons set forth below. Also, I must deliver to the attorney’s office a copy of my pay records or pay stubs for the six months prior to the filing of the petition and a copy of my driver’s license and social security card. I know that using a social security number that has not been issued to me is illegal and would not be effective. The attorney and his staff should not have to remind you of the requirement that you deliver the documents to his office. Also you should obtain a copy of your credit bureau reports. You can obtain them for free at If you are unwilling or unable to obtain your credit bureau reports, then the attorney’s office will take that action for you and you will pay an additional $150.00. Also, you must attend or participate in credit counseling before and after the filing of the bankruptcy petition. There is a separate page in the packet setting forth the approved agencies for the counseling. Again, a short class, by telephone or internet, on credit counseling must be completed before you can file.
____/____3.I am not (or will not be) in possession or have ownership of any non-exempt assets at the time of filing. Non-exempt assets are subject to seizure and potential sale by the Trustee. Some common non-exempt assets are: Money in Bank Accounts (other than (I.R.A.s), Cash, More than 1 Car (only 1 car per filer used as my regular means of conveyance to work is exempt up to an equity of $20,000.00 per motor vehicle), Real estate that is not my primary residence, Furs or Jewelry in excess of $1,000.00, Financial Instruments (like insurance, stocks, bonds, etc.), Interests in a Company, Business, Copyright, Recreational Vehicles, Boats, Business Inventory or Collections. Most debtor’s homes, in which the debtors live, in Kansas are exempt. There are exceptions and limitations regarding the Kansas homestead exemption in bankruptcy cases, particularly if you have moved to Kansas in the last two years. Please refer to the accompanying handout answering frequently asked questions for more detail. The law concerning the Kansas home exemption has been explained to me. You should inform the attorney if you have refinanced your home in the last two years.
____/____4.One non-exempt asset that Trustees often seek is an income tax refund for the current year, or from any other year, unless it has already been spent before filing. The Trustee will ask to see documentation regarding your tax refund(s) and if it is large enough, he will seize your refund(s) for the benefit of your creditors. In fact, other funds owed to you by almost any source (including from a divorce) are also considered non-exempt assets and subject to seizure including any accounts receivable for a business and any money you may have loaned to others and are still owed.
____/____5.Credit card or other charges and debts incurred with the intention of the same being discharged in bankruptcy may be deemed fraudulently incurred or otherwise nondischargeable, and there is a presumption of non-dischargeability if any so called “luxury goods or services” debt in excess of $500.00 is incurred within 90 days before filing, or if cash advances of $750.00 or more are incurred within 70 days before filing. The Trustee probably will want your credit card statements for at least the last three (3) months before filing. You should provide those documents to the attorney’s office (including the documents listed above) when you return the questionnaire to the attorney’s office. Therefore do not make any such charges or incur any such debt within at least 90 days before filing the bankruptcy petition, and of course, do not take cash advances within 70 days before filing. Even charges made prior to the 90 days might not be dischargeable and could form the basis of an objection by a creditor or the trustee.
____/____6.Income and expense information must be reasonable and accurate. You should provide the attorney’s office with your payroll stubs for the six (6) months prior to filing the petition. If the income and expense information is not reasonable and accurate,then different data may be used to determine if you are eligible for bankruptcy relief. Also, if it is determined that you have sufficient funds to pay a significant portion of your debts, then a motion to dismiss your bankruptcy case or to convert your case to a chapter 13 case could be made by the Trustee or by a creditor or on the court’s own motion. Accordingly, you should total your expenses as set forth in the questionnaire and compare the total with your monthly net income. If it appears that you have $300.00 more in net income than you have in monthly expenses, then you may be prevented from obtaining Chapter 7 relief and a Chapter 13 bankruptcy may be your only realistic option. Often when the net income figure is significantly greater than the monthly expenses, the client has not set forth all of the expenses or not set forth the correct amounts. There are some limitations as to acceptable or reasonable expenses for bankruptcy purposes and thosecharts are included in the packet. Also your monthly income figure is your average income over the six (6) months preceding the bankruptcy filing.
____/____7. A chapter 13 bankruptcy case generally involves making monthly payments to a Trustee over a 3 to 5 year time period. If you are not eligible for a chapter 7 filing due to an income based test, then the Chapter 13 plan must be 5 years or until the debts are fully paid. A chapter 13 bankruptcy has several potential advantages over a chapter 7 case such as; in some cases seeking a reduction in the amount of any secured debt to the value of the associated collateral as long as the debt was not incurred within 910 days on a motor vehicle or within one year for other items of personal property; stopping the accrual of interest on income tax debt; avoidance of a home mortgage foreclosure; avoidance of a motor vehicle repossession; and the discharge of certain debts which would not be dischargeable in a Chapter 7. These benefits, as well as others, have been explained to me, and I have decided to seek a chapter 7 bankruptcy rather than a chapter 13 bankruptcy.
____/____8.Awards and inheritance, if you have received or may receive a settlement or judgment as a result of a lawsuit or legal proceeding, the funds may be subject to seizure by the trustee, and the claim and recovery must be disclosed to the court and trustee. If you inherit from anyone, within six months after your bankruptcy discharge, then the inheritance will be subject to seizure by the trustee. A failure to report such funds, just as making any other false statement in the bankruptcy filing or at the meeting of creditors can result in your discharge being denied or set aside and even criminal charges against you.
____/____9.There has previously been uncertainty as to whether or not Individual Retirement Accounts will be considered exempt or non-exempt assets. A recent United States Supreme Court decision held that I.R.A.s are exempt. There are other and substantial variations regarding the exemption laws in each state and the exemption laws in Kansas are addressed in the documents given to me, and they have been explained to me.
____/____10.Some debts are not dischargeable and generally such debts include:
Child support and alimony (spousal maintenance) or other domestic court orders (there are special rules in Chapter 13 cases).
Income Tax debts
Student Loans
Fraud/intentional torts
Personal Injury from drunk driving
Criminal Fines and restitution
New debts (see item 5 above)
____/____11.It is necessary for the client(s) to attend a meeting of creditors. You will receive notice of the meeting soon after the filing of the bankruptcy petition. If you fail to appear at the meeting or the meeting must be re-scheduled, either because you failed to appear or because you failed to bring your driver’s license and social security card (or other proof of your social security number other than your driver’s license) or for any other reason, then you will incur an additional $150.00 attorney fee. Other such fees are addressed in the fee agreement, including an additional $175.00 fee for filing each amendment after the initial filing of the bankruptcy petition, and these are additional attorney fees if any part of your case is contested. Also, if you do not provide a copy of your credit bureau report to your attorney, which, can be obtained free of charge by you at then there will be an additional $150.00 attorney fee. Also, if you do not provide signed copies of your last three (3) years of income tax returns to the attorney when you deliver the filled out questionnaire back to the attorney, then you will need to sign a release so that the attorney can obtain the income tax returns (IRS Tax returns can be obtained by calling (866) 860-4259) and you will have to pay an additional attorney fee of $150.00. Often attorneys will appear for each other at the meeting of creditors. The debtor’s attorney generally only reads a few simple questions to the debtor to confirm that the debtor has accurately and knowingly listed all of the debts and assets, has not made mistakes and is aware of the information contained in an information sheet provided by the United States Trustee (that document is included in the folder which has been given to you) and if bankruptcy relief was requested previously by you. Again, please note that you must bring you driver’s license and social security card to the meeting (some other documentation may meet the social security card requirement such as a W-2 form). For Kansas cases the meeting will take place in the Federal Courthouse located in Kansas City, Kansas, at 500 State Avenue, which is not the WyandotteCounty Courthouse and is not the Kansas CityKansas Municipal Court.
____/____12.Bankruptcy discharge normally occurs around three (3) to six (6) months after the bankruptcy petition is filed. You should receive your Notice of Discharge Order from the Court Clerk the same day that the notice is sent to me. After the bankruptcy petition filing you may resume your normal financial activities (prior to filing you may need to pay your bills or expenses such as home and car payments with money orders and keep your receipts and records). You are responsible for your post-filing debts or contracts as those debts are not discharged.
____/____13.You will undoubtedly be asked if you wish to reaffirm certain debts. Rarely, is debt reaffirmation a good idea under the law in effect before October 17, 2005. After October 17, 2005 there is more reason to reaffirm some secured debts. Specifically, with the change in law, the automatic stay will not apply to secured debts which are not reaffirmed. Of course, you may voluntarily pay the debts that you discharge through the bankruptcy process.
____/____14.In order to keep collateral (such as a car or home), which may be security on a car or a home debt, you must bring the debt payment obligation current and make the required payments in full and on time. If you do not reaffirm these debts, it is possible that you will not receive any reminder notes or bills or envelopes from the creditor(s).
____/____15. Again, you should expect to present to the attorney, so that he can send to the Trustee and the Court and any creditor who requests them:
A.six (6) months of pay stubs;
B. your bank statements covering the filing date and the four (4) months just before the filing;
C.your credit card statements covering the filing date and the four (4) months prior to the filing date;
D.your three (3) most recent income tax returns (IRS records or tax returns can be obtained by calling (866) 860-4259);
E.documents showing that you have kept insurance in effect on any collateral regarding any secured debt;
F.expect to present to the Trustee your next year’s income tax returns. Failing to prepare or submit the income tax returns can cause a delay, dismissal of your case or the subsequent setting aside of your discharge as well as costing you additional attorney fees;
G.there is a requirement that you must attend a credit counseling class both before filing, unless there is a valid excuse for the delay, and then additional credit counseling after the filing but before discharge. See the page in the packet for the approved agencies.
____/____16.Any payments on loans or gifts to your relatives or your business associates made within two years prior to the filing of the bankruptcy petition may be seized by the Trustee. Also payments made to creditors within the 90 days immediately prior to the bankruptcy filing may be seized by the trustee. Generally payments will be sought by the Trustee if the payments to any creditor total, or exceed, $600 within the 90 day period just prior to the bankruptcy petition filing. You must list those payments in the questionnaire, and in the statement of financial affairs section of the bankruptcy filing, even if they are on your home mortgage or rent or car payments and are shown on your list of monthly expenses.
____/____17.If you are operating in a business, the Trustee may seek the termination of the business and may cause the assets and inventory of the business to be sold and have the proceeds from the sale made a part of the bankruptcy estate.
____/____18.This checklist is not a comprehensive statement of all of the bankruptcy rules or procedures. Rather, its purpose is to inform you, the client, of certain basic bankruptcy rules. You should always ask your attorney regarding any questions that you may have and inform the attorney of your concerns. Also, you should refer to the information packet that accompanies this checklist; it contains, among other things, an information sheet provided by the U.S. Trustee, which is referred to above. You will be asked, under oath, at the meeting of creditors if you have read that information sheet. I also know that my attorney and his office is a debt relief agency as defined by federal law, providing bankruptcy assistance in return for money or other valuable consideration to people who have consumer debts.
____/____19.You have been given a questionnaire to fill out. The questionnaire must be filled out accurately and completely. You must provide all of the requested information, such as:
A.your social security number,