Admitting financial hardship isn’t just a legal and business decision. In fact, making the decision to officially file for personal or professional bankruptcy can be an emotional one, complicated by the vast paper trail a person needs to properly file. Dealing with the emotions that accompany a bankruptcy filing is difficult enough, and shouldn’t be compounded by confusing and seemingly endless paper work.
That’s why it’s so important—especially if you own a small business—to ensure all paperwork is in place at all times, just in case financial hardship befalls your family or business. A few tips can provide much needed calm and organization in the midst of a bankruptcy filing storm, so make a few notes and keep them on-hand. All those papers you need to show a bankruptcy lawyer should be filed together in a safe place—whether at your home or place of business, and at least one other trusted employee should know exactly where they are. Here are some of the records a bankruptcy attorney needs upon filing.
Firstly, it’s important to file all relevant bank statements together in one safe place. It’s too easy to receive electronic statements and simple delete them monthly. Truthfully, it’s important to request hard copies from your bank and keep them together, constantly updating your file with the most recent statement on top. Ideally, you’ll invest in a fireproof file drawer or box to keep those important documents safe.
Tax documentation from several previous years is also important. In the event of a bankruptcy filing, the court will want to examine your track record, and a clean tax history will surely earn you more leniency than a checkered one. Keep all recent documents together, again, with the most recent on top.
Have you or your business donated any amount of money to a charity? If so, it’s crucial to document every dollar. Maybe when times were flush, you donated a portion of your surplus proceeds to a local hospital or school. Those funds need to be accounted for in any bankruptcy case.
Seal of the United States bankruptcy court. (Photo credit: Wikipedia)
Now that you’ve seen a quick rundown of all those important documents, it’s important to start organizing today. Consult with your own attorney about these and any other documents you might need in the event of a bankruptcy filing. Talk to your bank—both your personal and professional one—and make sure they know well in advance of any plans to file. You’ll be happy and relieved you took smart financial steps well before a bankruptcy filing, and your family will be delighted to help ease you back into financial stability.