When you are preparing the bankruptcy petition, DO NOT select exemptions for assets on Schedule A and B until AFTER the bankruptcy petition is complete. This is due to the fact that as you work through the data, gathering information for the bankruptcy petition and inputting it on the correct Forms and Schedules, you will normally uncover more assets that need to be listed on Schedule B.
A typical example is a 401K. You normally never find out about the 401K until you get to Schedule I and start reviewing the pay check stubs. At this point, you need to go back to Schedule B and add in the 401K as an asset. This addition will cause you to make adjustments to the exemptions; therefore, if you wait until the end (the Finalization Stage as I call it) you can select all your exemptions at one time because you will have all the assets entered.
Note: By selecting exemptions I am not suggesting that a non-attorney choose exemption allowances that are not automatically selected by the bankruptcy software. It is important to keep in mind that a non-attorney is not provided the authority to make this decision. Also, this is why most bankruptcy software programs have features that allow exemptions to be automatically selected as long as the right category of asset TYPE is selected on Schedule B.
However, in some rare situations, the software may select the wrong exemption allowance for an asset. No software is perfect. If you are a non-attorney and you happen to believe that a different exemption may need to be selected than the one provided by the software, make a note on the Attorney Cover Sheet so that the attorney can check this exemption selection and make sure the right one appears on Schedule C.
The Bankruptcy Petition Preparation Process
The following is the typical process for the initial procedures in processing the typical Chapter 7 or Chapter 13 bankruptcy petition:
1. Enter in initial data provided by the debtors on the Client Intake Forms;
2. Compile a list of additional questions and issues (during the Initial Preparation Stage) that need addressed before the bankruptcy petition can be completed;
3. The client intake questionnaire session is completed and answers obtained;
4. The answers obtained from the client are updated within the bankruptcy petition;
5. At this Finalization Stage, Schedule A and B assets are assigned exemptions so that Schedule C can be prepared;
6. Any additional issues are detailed (regarding assets, unexempt equity or any other issue within the bankruptcy petition) and provided on the Attorney Cover Sheet;
7. The draft of the bankruptcy petition (PDF format) and the Attorney Cover Sheet are provided to the attorney for the initial review.
Look for more tips like these to come your way soon.
Disclaimer:
The information in this article should not be considered legal advice. It is written by Victoria Ring, a certified paralegal and bankruptcy training instructor. All information is subject to the guidance of licensed bankruptcy attorneys in your U.S. state.
Victoria Ring
http://www.713training.com
http://www.713attorney.com
http://www.713bankruptcy.com
http://www.navba.org
http://www.servantofjesuschrist.com
