Common Paperwork Mistakes That Can Delay a Bankruptcy Case

Filing for bankruptcy is a brave step toward regaining control of your finances. It offers a chance to hit the reset button and build a more stable future for your family. However, the process involves a significant amount of paperwork. Even a small honest mistake on these forms can cause the court to pause or delay your case. At Sisk Law Firm, we believe that knowing what to watch out for can help you move through the process as smoothly as possible.

If you are feeling overwhelmed by debt and want to ensure your filing is handled correctly the first time, reach out to us today. You do not have to navigate this alone. Contact Sisk Law Firm at (504) 499-5919 or fill out our online contact form for a consultation.

Forgetting to List All of Your Debts

One of the most common mistakes people make is failing to list every single person or company they owe money to. In bankruptcy, these are called your "creditors." If you forget to list a debt, that specific debt might not be wiped away at the end of your case. This means you could still owe that money even after your bankruptcy is finished.

To avoid this, gather every bill, credit card statement, and medical notice you have. It is also helpful to check your credit report to see if there are older debts you may have forgotten about.

• Credit Cards: List every card, even those with a small balance.
• Medical Bills: Include old hospital visits or doctor consultations.
• Personal Loans: Don’t forget money borrowed from friends or family members.
• Back Taxes: Ensure any money owed to the IRS or state is documented.

Not Reporting All Sources of Income

When you file for bankruptcy, the court needs to see exactly how much money is coming into your household. This helps them determine which type of bankruptcy is right for you. Many people remember to include their main paycheck but forget about "side hustles" or other small amounts of money.

Leaving out income can make it look like you are trying to hide money from the court. Even if it was an accident, it can lead to extra questions and long delays.

• Part-time work: Include income from seasonal jobs or gig work.
• Government benefits: This includes Social Security or disability payments.
• Rental income: If you rent out a room or a second property, report those payments.
• Child support or alimony: These are considered forms of income by the court.

Inconsistent Information Across Forms

A bankruptcy filing consists of several different forms and schedules. The court looks at all of them together to get a full picture of your life. If you list your monthly rent as $1,200 on one page but $1,500 on another, the court will likely flag it. These "clerical errors" are simple to make but can take weeks to fix once the court finds them.

It is helpful to keep a "master list" of your expenses and assets next to you while you fill out the paperwork. This ensures that every time you mention a specific number, it stays exactly the same throughout the entire packet.

Missing the Credit Counseling Certificate

Before you can officially file, the law requires you to take a brief credit counseling course. This is a simple class designed to help you understand budgeting and debt management. Once you finish the class, you receive a certificate of completion.

You must file this certificate with the court, usually at the same time you file your initial paperwork. If you forget to include it, the court may dismiss your case entirely. This would mean you have to start the whole process over from the beginning, including paying the filing fees again.

• Timeline: Complete the course within 180 days before you file.
• Approved Providers: Ensure the agency is approved by the U.S. Trustee’s office.
• Verification: Double-check that your name is spelled correctly on the certificate.

Failing to List All Assets

An "asset" is anything of value that you own. This includes obvious things like your house and car, but it also includes things you might not think about. For example, a pending personal injury lawsuit or a future tax refund is considered an asset.

Many people worry that listing an asset means they will lose it. In many cases, specifically in a Chapter 7 bankruptcy, there are "exemptions" that allow you to keep your essential property. However, if you don't list the item at all, you cannot claim an exemption for it. Honesty is the best policy to keep your case moving forward.

• Retirement accounts: List your 401(k) or IRA.
• Household goods: Give an honest estimate of what your furniture and clothes are worth.
• Bank accounts: Include every account, even if the balance is zero.

Estimating Expenses Instead of Using Real Numbers

The court uses your monthly expenses to decide if you can afford a repayment plan. This is a major part of a Chapter 13 bankruptcy, where you pay back a portion of your debt over three to five years. If you "guess" your expenses and make them too low, your monthly payment might be higher than you can actually afford.

Take the time to look at your bank statements from the last three months. This will give you a realistic average for things that change, like groceries, gas, and utility bills.

1. Utilities: Average out your summer and winter bills.
2. Transportation: Include gas, insurance, and routine car repairs.
3. Insurance: Don't forget health, life, and property insurance premiums.

Using the Wrong Forms

Bankruptcy laws and forms can change. If you download an old version of a form from the internet, the court might reject it. The court systems in Jefferson Parish, Orleans Parish, and surrounding areas have specific requirements for how documents should be formatted and submitted.

Working with a professional team ensures that you are always using the most up-to-date documents required by the local courts. This prevents the frustration of having your paperwork returned to you because a signature was in the wrong place or a page was missing.

Let Sisk Law Firm Help You Get It Right

The paperwork involved in a bankruptcy case is detailed and can feel overwhelming. At Sisk Law Firm, we take pride in helping our neighbors in Southeast Louisiana navigate these requirements with confidence. We understand the local court systems and can help you avoid the common traps that lead to delays.

Our goal is to help you achieve the financial fresh start you deserve without the stress of paperwork errors. We serve clients throughout Jefferson, Lafourche, St. Tammany, and Orleans Parishes. Let us provide the practical guidance you need to move toward a brighter financial future.

Contact Sisk Law Firm today at (504) 499-5919 or via our online form to schedule a consultation and learn more about how we can support you through the bankruptcy process.