With the expectation that bankruptcy filings will increase over the next few months, this might be a good time to revisit the documents filed with a bankruptcy filing and the information they provide. The focus today is on the Notice of Bankruptcy, Petition, Schedules and Statement of Financial Affairs, which are always filed. There are several other papers that may be filed (required or not), depending on the bankruptcy case. 
 
A bankruptcy case is initiated by filing a petition in bankruptcy court. Once the petition is filed, the automatic stay is effective, and all efforts to collect from the petitioner or to enforce a security interest must cease. A filing also stops litigation against the petitioner. It generally does not stop litigation against a non-debtor co-defendant, but many courts will order a stay of the entire litigation nonetheless. The party pursuing the litigation claims must assess whether to (i) seek relief from the automatic stay in the bankruptcy case to continue the litigation, (ii) dismiss the pending case and file a complaint within the bankruptcy case, or (iii) simply file a proof of claim in the bankruptcy case for the relief it is seeking, with the claim litigated in the claims process.
 
A Notice of Bankruptcy is sent to all creditors listed by the petitioner. The Notice tells us where the case is filed, the name of the debtor and any aliases. It also tells us the debtor's address, contact information for the debtor's attorney and the bankruptcy trustee if one is appointed, and the address for the clerk of the bankruptcy court.  
 
The Notice tells us what type of bankruptcy case was filed, i.e., under what Chapter of the Bankruptcy Code. The Notice is an official form (like so many other bankruptcy papers) promulgated by the United States Trustee's Office. However, the content differs by type of bankruptcy case.
 
If petitioner is an individual, the case could be filed under Chapter 7, 13, or 11. Sole proprietorships sometimes show up under Chapter 13. If the petitioner is a farmer, the case may be filed under Chapter 12. If the petitioner is a business, the case may be filed under Chapter 7 or 11. However, Chapter 11 cases are not all alike. It could be a small business Chapter 11, a Subchapter V Chapter 11 or just a Chapter 11.   
 
The type of case is shown in the title on the Notice. This is important information because the rules and timetable attendant to the case can vary. Also, the type of case determines whether a bankruptcy trustee is appointed.
 
The Notice of Bankruptcy also tells us whether a proof of claim is required and the deadline for filing. Proofs of claim are prepared on official forms, which can be found by googling "bankruptcy official forms." Note there are instructions for each form, and special forms are required for claims based upon a loan secured by a residential mortgage.
 
Last, the Notice of Bankruptcy provides deadlines. Bankruptcy deadlines are very important because a case can move quickly, and failure to comply with deadlines can result in waiver of a claim or interest. Besides the deadline for filing a proof of claim, the Notice tells us the date, time and place of the first meeting of creditors. For individual cases, the Notice tells us the deadline for filing an objection to discharge or to the debtor's claimed exemptions.
 
The bankruptcy Petition provides basic information about the petitioner, such as name, business name(s), federal employer identification number or social security number, and address. The petition tells us again under what type of bankruptcy case the petitioner is seeking relief. If it is a business, it tells us the form and type of business. The petitioner is asked to estimate the number of creditors, total assets and total liabilities. Finally, the petitioner must sign the petition under penalty of perjury that the information provided is true and correct. 
 
With the Petition, the petitioner is to file Schedules and the Statement of Financial Affairs, commonly called the "SOFA." Often these are not filed with the Petition, and the Court will then set a deadline for when they must be filed. A bankruptcy case can be dismissed for failure to file Schedules and the SOFA.

The Schedules are just that. They provide lists of petitioner's property with value (Schedule A/B), petitioner's exemption claims, if an individual (Schedule C), creditors whose claims are secured by property, with information about the collateral (Schedule D), creditors with unsecured claims and those with priority in distribution under the Code (Schedule E/F), leases or executory contracts (Schedule G), and any co-obligors, including guarantors (Schedule H). Analysis of the Schedules provides a picture of the petitioner's financial circumstances, with clues as to why the petitioner sought bankruptcy protection. They also can inform the creditor whether the petitioner believes it is holding claims against the creditors or others.
 
The SOFA are questions to the petitioner about the petitioner's financial affairs in the years preceding bankruptcy. The questions are more extensive for the business petitioner as opposed to the individual. The petitioner is asked about income, payments made, gifts/contributions, losses, and legal actions, including repossessions and foreclosures. The petitioner must provide information about the financial records and location of books and records, and pertinent information about the business. For the individual petition, the SOFA asks about business interests. For the business petitioner, the SOFA asks about the officers, control persons, and payments made to insiders in the year prior to filing. 
 
Creditors are invited to attend the first meeting of creditors where they can be asked specific questions regarding the Schedules and the Statement of Financial Affairs. Together, these can preview possible bankruptcy litigation, such as preferences, or voidable conveyances, voidance of liens, or assumption or rejection of executory contracts. A party wishing to receive notice of filings within the bankruptcy case should file a Notice of Appearance.
 
The firm's bankruptcy practitioners are frequently called upon to review and analyze bankruptcy filings, prepare proofs of claim, and notice appearance on behalf of clients. If you have questions or wish to receive further information, please contact us.