If you are in the process of arranging your finances and planning for the future, you may find yourself unable to meet your agreements or pay off your debts. In this case, filing for bankruptcy can be a sensible way to earn a clean slate, to start again financially, and to wipe away all outstanding balances, freeing you from creditors.
Contrary to popular belief, the process is relatively simple and involves just a few steps. As part of the filing, however, you will be required to gather several documents, and it is easy to become overwhelmed with all the paperwork. Here are some of the must-have documents to add to your arsenal before you kick off the process, which will help the filing go as smoothly and quickly as possible.
What Do I Need Before I File for Bankruptcy?
Before submitting your petition, you will need to compile or collate the following:
- A Complete List of All Debts: Most of your significant debts will be present on your credit file, so the first step is to take home a copy of your report from one of the primary providers: Experian, Equifax, or TransUnion. This will offer you a strong starting point to work from, outlining most of your primary debts. Remember, however, that there may be some outstanding balances that are not showing up on your report, so make sure you do your research and gather every piece of evidence you can.
- Proof of Monthly Income: Evidence of your monthly income and expenditures is also required before you file. Employees will need six months’ worth of pay stubs prior to filing, as well as their last two W-2’s. Any extra income will also need to be declared—this may include income from rentals, Social Security funds, or disability allowance. If you are self-employed, you will be required to provide a year-to-date profit and loss statement for this year and the two immediately before filing. You may also need to present business bank statements to verify this. Any bank statements or retirement statements may also be requested, so adding copies of these to your list of documents is advisable.
- Tax Returns: Debtors will need to offer copies of tax returns or transcripts. These should be for the last four years if filing for Chapter 13, and 2 years for Chapter 7.
- Vehicle Value: If you own a car, you will need to provide proof of its current value, as well as statements for any loans. This should show the outstanding amount, the monthly payment, and how far behind you are in those payments. Proof of registration, ownership, and insurance may also be required.
- Real Estate Value: If you own any real estate, you need to prove the fair market value. In that case, this is usually accessible via an appraisal, an online valuation, or a broker’s price opinion. Any mortgage statements should show the payment amounts, any loan balances, a deed of trust, and proof of home insurance.
- Additional Expenses: Proof of any unusual expenses will also be required, such as alimony or child support. The relevant document (e.g., child support order) will usually be accepted for this.