Filing for bankruptcy requires a lot of paperwork. The majority of bankruptcy paperwork includes schedules that list your debts, income, expenses, and assets. The bankruptcy court reviews this information and uses it to assess your financial situation. It’s then used to determine if your debts are discharged.
In addition to the schedules, you’ll also need to submit a Statement of Financial Affairs (SOFA) when you apply for bankruptcy. SOFA is a form that includes any recent financial transactions, finances, and other information not included in your bankruptcy schedules.
Chapter 7 and Chapter 13 bankruptcy cases both require SOFAs. It is a form with straightforward questions and you’ll need to checkboxes on the form where appropriate. Despite how simple the form seems, it’s imperative it be complete and accurate or you risk the court questioning your bankruptcy case.
The SOFA has 11 sections, each of which covers an aspect of your financial life. These include:
Part 1: Marital Status and Living Situation
The first section of the SOFA asks you to confirm your marital status and explain where you’ve lived in the past three years. It also asks if you’ve lived with a spouse or partner within the last eight years, even if this is no longer the case, and whether or not you did so in a community property state.
Part 2: Source of Income
The second section examines income you’ve received from working or owning a business, and whether or not that was your only source of income. In this section, you’ll also list if you’ve received money from domestic support, unemployment benefits, legal settlements, lottery or gambling winnings, and stock earnings.
Part 3: Recent Payments
The bankruptcy court needs to know if you’ve prioritized certain debts over others. The court verifies fair treatment of your creditor. Any payments of $600 or more to any single creditor within the last 90 days could potentially raise a red flag. Likewise, if you repaid debts or transferred any property to anyone you know personally you’ll need to list them in the bankruptcy SOFA
Part 4: Legal Action
The fourth section addresses any legal action you’ve recently faced related to your finances. You’ll list lawsuits, foreclosures, wage garnishments, repossessions, and so forth in this section.
Part 5: Gifts and Contributions
This section is where you list any charitable contributions or gifts you’ve given in the last two years that were worth more than $600.
Part 6: Losses
If you’ve had anything stolen from you or lost anything of value within the last year due to gambling or natural or man-made disaster, you list it in this section.
Part 7: Payments or Transfers
In this section, you list any payments or property transfers made to any attorney, bankruptcy petition preparer, or credit counseling services. This section also addresses other property transfers, including those made into a trust within the last 10 years.
You can learn more about how payments to creditors in this article from Nolo.com.
Part 8: Financial Property Holdings
This section covers certain financial accounts, instruments, safe deposit boxes, and storage units. You’ll need to list all of your financial accounts in this section. You must also provide information about the contents of safe deposit boxes and storage units you own.
Part 9: Other People’s Property
It might surprise you to learn that property owned by other people might need to be listed in your SOFA. This occurs when you hold or control that property, even if it’s in a trust or in storage.
Part 10: Environmental Information
This one doesn’t apply to that many people filing for bankruptcy, but you’ll still need to review the section. It’s most often applied to those who own business related to fuel, chemicals, or waste products.
Part 11: Businesses You Own or Have a Connection To
If you’ve owned any part of a business or been tied to a business as an officer, director, or managing executive in the last four years before filing, list that information. Furthermore, this section asks if you’ve given a financial statement to anyone concerning your business within the last two years.
A Bankruptcy Attorney Helps You with the Bankruptcy SOFA
These questions might seem cut and dry until you need to answer them in relation to your situation. Even a simple mistake could call your bankruptcy into question. In a worst-case scenario, mistakes result in dismissal of your case.
If you’d like to know more about the Statement of Financial Affairs or any other documents you’ll need to complete when you file for bankruptcy, contact the Law Office of Robert M. Geller at 813-254-5696 to learn more.