Filing Bankruptcy? Then Know Thyself!

Your bankruptcy attorney doesn’t expect you to know bankruptcy law, but he does expect you to have basic information about your finances.

I require that clients fill out an initial consult form prior to meeting with me. The form is a simple, two-paged form with contact information on the first page and information about assets and debt on the second page.

The form allows me to, almost instantly, get an overview of a client’s financial situation.

I can see if they own a home, how much it’s worth, what they owe on the mortgage, if there is one mortgage or more than one, the amount of their monthly mortgage payment, and whether they are current on the mortgage payments.  The form also calls for this information about vehicles.

Regarding income, I can immediately see the income of the clients, which is important in my evaluation of what Chapter–typically 7 or 13–to recommend.

But then there’s the blanks…

You Didn’t Know WHAT?

I’m amazed at how many clients don’t know basic information about their finances, or just see no point in giving me that information. One exchange went like this:

Me: “You didn’t list the value of your home. What is your home worth?”

Client: “We have no idea.”

Me: “Is it worth over $200,000? “

Client: “Oh, no, it’s not worth $200,000!”

Me: “Is it worth more than $150,000? “

Client: “Probably a little more than that.”

Me: “Is it worth $175,000?”

Client: “That’s probably about right, maybe $165,000 or $175,000.”

Me. “So you do have an idea about the value of your house then?”

You get the point.

And I confess I’d like to choke these types of people. (Speaking figuratively, of course!) Some meetings go on like this about the home, the cars, the income–pretty much everything. They know almost nothing, yet want advice about how to solve their financial problems.

The time needed to pull this information out of these types of clients could be better spent coming up with a strategy to deal with their debts. After all, that’s why they called me in the first place.

Know Thyself

A smart guy named Socrates once said, “know thyself.”  And when it comes to financial issues, that’s pretty good advice. It really doesn’t take much effort to find out an approximate value of your house or cars.  The same goes for your debts and income. Is it really that hard to simply list out your creditors and the amounts owing?

Your bankruptcy lawyer’s advice depends on the facts of your case, and for her to help you, she needs accurate information about your finances. So know thyself!