Help with Bankruptcy Forms: Statement of Financial Affairs

One of the bankruptcy forms you will need to complete if you plan to file bankruptcy is called the Statement of Financial Affairs. This document outlines specific information about the payments you may have made recently to creditors. As with all bankruptcy forms you complete, it is critical for you to complete this form accurately and thoroughly before turning it in. Missing or incomplete information may cause the bankruptcy court to reject your petition for bankruptcy or to reassign it.

What To Include

When filling out the Statement of Financial Affairs document, you will list any of the recent payments or transactions in which you have paid a creditor over $600 dollars in one payment. The bankruptcy trustee is looking for information regarding the types of payments you may have made to one creditor while not paying another. Here's why.

If you have paid one creditor a significant amount of money, usually over $600, it may show preferential treatment of one creditor over another.
If you have paid a family member or friend a significant amount of money, this also shows potential preferential treatment over one creditor. It can also be a warning sign to the bankruptcy trustee that you may be hiding assets from the court.
If in either situation the bankruptcy trustee learns about such transactions, the trustee may require that the creditor return the funds to the court so the court can properly distribute the funds among creditors.

In some situations, it is okay to pay creditors more than $600. One example of this is with mortgage payments. Tax payments, tuition payments or other regularly occurring payments over this amount are generally not a concern. Rather, the focus is on any payment made to a creditor over this amount in the last 90 days (some courts go back six months) needs to be documented.

Keep in mind that it is not a good idea to try to hide such payments. It is likely the court will find them. The court is likely then to throw out your petition for bankruptcy.

Hiring an Attorney

When completing any of your bankruptcy forms, including the Statement of Financial Affairs, provide accurate data to the courts. One of the best ways to ensure this occurs is to hire an attorney to process your bankruptcy for you. In doing so, you reduce the chances that you will enter a mistake or forget about an important payment. Your attorney can ensure that the document is accurate and is submitted according to the court's wishes.

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