As a result of the COVID-19 crisis, you may have found yourself on uneven financial footing. This can be a difficult process to navigate but should not add fire to the already high flames by making the process more difficult than it needs to be. As a result, you will want to partner with a bankruptcy attorney that has a firm footing in both the legal and business impacts of bankruptcy and how you can come out of the situation in the best possible way. In this article, we'll discuss what documentation you will need to file for bankruptcy in your business.
When filing for bankruptcy, you will need to disclose information regarding your financial dealings as well as any assets, debts, as well as property transfers. The documents you provide will be vetted by a bankruptcy trustee to make sure that your information is legitimate. Whether you are filing for Chapter 7 bankruptcy as an individual without much income or Chapter 13 bankruptcy that requires a repayment plan, many of the documents required are the same.
Whether you are an employee or a business owner, you will need to have the right kind of income documentation and pay stubs that show the trustee your financial situation compared to your current financial needs and why you are filing for bankruptcy. Income sources such as W2 forms, social security funds, and disability insurance checks can be forms of income streams that you can use if you are the employee of a company. For business owners, year-to-date profit and loss statements, as well as business bank statements, can provide proof of bankruptcy.
You will need to provide tax returns from the last two years in Chapter 7 filings and from the last four years in Chapter 13 filings. If you are not able to provide these tax filings, then you will need a short explanation fo why you cannot provide them. This can be a result of nontaxable disability benefits or if you merely forgot to file your taxes. An experienced attorney can help you with these explanations and letters if they are required.
Bank Account Statements
For every account that you have, you should provide bank account statements to the bankruptcy trustee. If you do not have a bank statement of previous purchases, this can be a bit of a snag and the trustee will require an investigation be opened into your account. Having an attorney with experience
in delivering bank account statements can ease the situations when it comes to dealing with trustees when they need access to this information in order to allow you to move forward with your bankruptcy case.
Real Estate and Mortgage Statements
Owning real estate can add additional complications to your bankruptcy proceedings. If you do own real estate, you will most likely have to provide proof of your property's fair market value. This can be appraised according to property tax appraisal values that can value your property according to real estate tax purposes or quick sales values that is a valuation method that is required for properties that need to be disposed of quickly and don't have time to be a part of the normal real estate market that can take several months or years to sell. You have a few different ways of going about getting the valuation including obtaining an online valuation, a real estate broker's valuation opinion, or even a full appraisal. Make sure to check in with your attorney about how you get a real estate appraisal as this can factor into the trustee's decision. Also having access to your current and previous mortgage statements is important because they will show loan balances that can be key to determining whether or not you can properly file for bankruptcy.
If you have other legal situations that play a role in the bankruptcy that you are incurring, you will need to also provide that information to the trustee as well. Paying alimony, child support, and other unusual forms of payment are all necessary for trustees to file the bankruptcy. A trusted lawyer
can get you this documentation while keeping your legal rights intact during the proceedings.
Filing for bankruptcy can be quite unnerving during this period in time. While it is a difficult process, having an experienced attorney
to guide you through the multifaceted adventure is absolutely essential if you want to get out of it in the best possible way. To learn more about how we can help you, feel free to contact us
today. We look forward to hearing from you.