Filing Bankruptcy in Detroit Michigan? You’ll need to gather these documents.
I have been a Michigan Bankruptcy attorney for over 28 years, practicing exclusively consumer bankruptcy filing cases primarily in the Detroit Bankruptcy Court which covers nine surrounding counties including Wayne, Oakland and Macomb bankruptcy filings. Bankruptcy Trustees are required to review documentation regarding your income and assets when you file a bankruptcy petition. In the early days of my practice, the bankruptcy trustees did not ask for much documentation associated with a consumer filing, usually just the debtor’s government issued picture identification and social security card and if the case was a Chapter 13 bankruptcy, they did not even ask for that. Today, after the 2005 bankruptcy amendments, things are much different and, on the typical file, it is not unusual to have 100 pages of documentation to send to the trustee. Most of this documentation will have been provided to my office before I even file the case, as I need the paperwork to actually prepare the petition and bankruptcy schedules before I can even file the case for a client. In the “old days” we would simply bring all of the documents (usually originals) to court with us and the trustee would verify the information in them at that time, today, most trustees have an online portal in which the forms are submitted electronically in PDF format and automatically organized for the trustee to more easily access the information needed. The information below applies to Chapter 7 bankruptcy cases for the most part, but is also often requested by our Detroit chapter 13 bankruptcy trustees as well.
Why does the Bankruptcy Trustee need this information?
Doveryai no Proveryai (Trust but Verify). I went to college in the 1980’s and then President Ronald Reagan used to say this to Russian leader Mikhail Gorbachev after negotiating a deal to disarm the vast nuclear weapons arsenal amassed by both sides. The trustees are basically doing the same thing. They are going to look at the documentation you provide to them, to verify that what you are disclosing on your bankruptcy petition matches the paperwork provided to them. It’s not that they don’t trust you, it’s just part of their job. The principal role of a bankruptcy Trustee is to review your assets to determine if a distribution could be made to your creditors. Just like most of us, bankruptcy trustees have a boss (in this case it’s part of the federal government) and if they don’t perform their job correctly, they could lose it.
Documents required when you file bankruptcy:
Driver’s license or other form of government issued state ID such as a State of Michigan ID card or passport and social security card. Believe it or not, there have been cases where people have stolen others identity, obtained credit under that name and then filed bankruptcy portraying themselves as the person they stole the identity from in order to wipe out the debt and get a “fresh start” in order to once again get credit in their name.
Pay-stubs or other proof of income.
Most people are W2 employees and get a regular pay-check. Trustees will generally want to see three to six months of pay-stubs (or bank statements if you have direct deposit with no stubs) from the period up to the date you filed your bankruptcy petition. If you are on a fixed income from social security or long term disability, a yearly statement or bank statement indicating the amount you receive will need to be provided. If you are self-employed or have a small business, the trustee will want to see bank statements from the business and profit and loss statements.
The bankruptcy trustee will want to see the last two years most recently filed federal income tax returns. Tax returns (with attached schedules) can contain a lot of information that may be useful to the trustee but in most cases, the trustee is looking at them to simply verify the income stated and the amount of the tax refund you received or are entitled to. Some trustees may wish to see your State of Michigan tax return as well. Many of my clients have not filed tax returns in a number of years because they are not required to do so because they either did not earn sufficient income or collection social security or disability and are not required to file. If you did earn income and are required to file but simply did not, the bankruptcy trustee will most likely hold your case open and require that you file your returns and supply his or her office with copies before closing your case. The list below is by no means exhaustive and the trustee in your case may require more documentation. When you file a bankruptcy case, you are required to cooperate with the trustee in his or her investigation of your assets which requires you to gather the documents requested.
If you are purchasing/financing a car, boat, manufactured home, travel trailer etc., your bankruptcy trustee will definitely want to see your title (available from the Secretary of State in Michigan) to ascertain if the car finance company properly put their name on the title thereby perfecting their lien. Some trustees will still want to see your title even if you have an older car that is no longer being financed, just to verify the year, make and model. Many of my clients will say that they do not have the title until the car is paid for. This may be true if you purchased the vehicle outside Michigan, but if you purchased it in Michigan and the vehicle is not a lease, the Secretary of State would have mailed you your title shortly after the purchase. If you have misplaced it, you can get a copy at the SOS for a small fee. Click here for a link to obtain a duplicate title http://www.michigan.gov/sos/0,4670,7-127-1585_1619-25515–,00.html.
Real Estate documentation
For bankruptcy cases filed in the Detroit Michigan bankruptcy court, the Detroit Chapter 7 Bankruptcy Trustees will want to look at generally four types of documents related to real estate. These documents must be provided to your assigned Trustee generally one week before your bankruptcy hearing date also called the Section 341 Meeting of Creditors. If you own real estate including your home, vacant land, commercial buildings, cottages, cabins etc. inside or out of Michigan, the trustee will want generally four kinds of documents related to that property.
The recorded deed will tell the trustee who owns the property (you alone or you and a relative or business partner), when and how much you paid for the property, and who you bought it from, among other information. Your title company should have mailed you a copy of the recorded deed after your closing or the document is available at your local county registrar of deeds. I usually can obtain a copy for my clients via an online service.
The recorded mortgage will be reviewed by the trustee to make sure that your mortgage company (if you have one) properly perfected their lien (the mortgage) on your property. This document is generally not provided to you, but is available at your county’s registrar of deeds. Again, I can usually obtain a copy of this online for my clients. This document is required for all mortgages on the property.
Recent Mortgage Balance Statement
This document will show the trustee how much is owed on your mortgage or mortgages if you have a second or third mortgage. You should be mailed a copy of this every month by your lender. Most trustees will allow a recent copy of your credit report as evidence of your mortgage balance.
Property Tax Bill or appraisal
Your trustee will want to see some evidence of the valuation of your property such as your most recent SEV or state equalized valuation which is located on your property tax bill. A recent appraisal is even better if you have one.
401k, 403b, Stock portfolio Statements etc.
The trustee will want to verify whether your 401k or other retirement plan is a qualified plan for bankruptcy purposes as well as verify that the amount therein matches what is disclosed in the bankruptcy schedules.
How do I get more information on filing bankruptcy in Michigan?
Detroit bankruptcy attorney Walter Metzen is available to personally meet with you to discuss these and any other questions you might have regarding filing a consumer bankruptcy whether it’s Chapter 7 or Chapter 13. The main office is conveniently located just one-block from the US Bankruptcy court in downtown Detroit with a satellite office on Woodward in Royal Oak. Feel free to call me anytime at 313-962-4656.