The Statement of Financial Affairs stands as one of many documents required in chapter 7 and chapter 13 bankruptcies.
This document covers details from income to any business in which the filer has had an interest in the last six years. Gross income is listed for the present year to date as well as for the two previous calendar years.
Statement of Financial Affairs: Payments & Legal Action
One of the trickier questions asks those filing to list all payments to any individual creditor in the 90 days before filing that add up to $600 or more. Question 3a poses a query in the negative, “unless the aggregate value of all property that constitutes or is affected by such transfer is less than $600.” That means that if one creditor was paid 3 payments of $201 in the 90 days before filing that’s $603 in the aggregate and must be disclosed.
All lawsuits and administrative proceedings in which the filer is or was involved in the one year prior to the filing date are disclosed under item 4a. This includes the caption and docket number of the case, the nature of the case and other basics.
Garnishments and property attached or seized in the year before the filing are disclosed under 4b. Repossessions and foreclosures in the year before the filing come under question 5. Any property transferred back to a creditor during this time period must be listed. This includes a deed in lieu of foreclosure. If you would like to learn more about what foreclosure means for your property then take a look at this blog post on ben buys indy houses.
Other Financial Disclosures
Gifts and charitable donations in the year before the filing must be disclosed under question 7. This excludes gifts to family members under $200 and charitable contributions of less than $100 per recipient.
Payments made to a bankruptcy attorney involved in the case are disclosed twice in the overall bankruptcy papers. Once comes under SOFA item 9. This item also requires disclosure of payments made to anyone for efforts such as debt consolidation in the year before filing.
Item 10a requires disclosure of transfers of any property outside the ordinary course of the filer’s business or financial affairs in the two years before filing. The response requires details not only of an outright sale of property but also disclosure of property given as security. Anything placed into a trust in the 10 years prior to filing in which the debtor is a beneficiary must be listed under 10b.
List any bank accounts closed in the year before filing under item 11. Safe deposit boxes and a description of their contents are targeted under question 12. Failure to disclose such items and to claim a valid exemption on Schedule C will cause problems.
Statement of Financial Affairs & Full Disclosure
Anyone filing bankruptcy who has engaged in business of any type in the six years before the petition is filed faces a series of questions starting with number 18 requiring a basic description of the nature of the business and other details. Follow up questions ask about book keepers and accountants as well as financial statements. Other details include the dates of the most recent inventories.
This summary touches some but not all details required by the Statement of Financial Affairs. Many documents go into a complete bankruptcy filing. Bankruptcy schedules are the backbone of the filing. The means test determines whether the filer is eligible for Chapter 7.
The current version of the actual Statement of Affairs can be found on the bankruptcy court’s official website.
Anyone who files needs to read the complete SOFA. This and all documents are signed under the pains and penalties of perjury. It’s recommended that an experienced bankruptcy attorney be retained to assist.
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