Wednesday, February 8, 2012

What is a "Statement of Financial Affairs" in a Bucks County Bankruptcy?

A Bucks County debtor filing for bankruptcy must submit a Statement of Financial Affairs (affectionately called "SOFA" to bankruptcy lawyers in Bucks County) to the trustee. This is an official form from the bankruptcy court consisting of twenty five questions concerning all aspects of the debtor’s personal and business financial background related for the previous three years. If the Bucks County resident is filing for bankruptcy, whether they are filing Chapter 7 or filing a Chapter 13, the Statement of Financial Affairs must be completed. If the debtor is married and filing a joint petition, only one statement need be filled out which will contain information on both persons.

All sources of income from employment and business must be disclosed. In addition, any other sources of income, including unemployment, disability, lottery winnings, and recoveries from lawsuits. Also, payments to creditors made within ninety days of filing must be listed with the dates of payment, amount paid, and remaining balance. All lawsuits, garnishments, repossessions, and foreclosures within one year must be listed and explained. Charitable contributions over $100 within the prior year of filing must be disclosed. All losses from fire, theft, gambling or other casualty must also be disclosed. Even safe deposit boxes must be listed along with a description of contents.

If an individual owns a business, an explanation of the business must be included on the Statement of Financial Affairs. This will include the type of Bucks County business they have, if there are assets, and the corporate structure.

As you can see, the Statement of Financial Affairs is extremely lengthy and comprehensive. As one of my Bensalem clients told me recently, "I would hire a Bucks County Bankruptcy lawyer just to help me with the Statement of Financial Affairs!" Due to its complexity, you should rely on your bankruptcy attorney before submitting the statement and, of course, consult him/her should you have any doubts as to what should be included. You want your statement to be as honest and accurate as possible.

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