Overview of the Bankruptcy Statement of Financial Affairs

Bankruptcy worksheet
••• The Statement of Financial Affairs is one of the many forms a debtor files in a bankruptcy case. Getty Images

When you file a bankruptcy case, you probably be amazed the amount of paperwork you're required to fill out. Once you've gathered everything together, your packet can be 70 pages or longer. Most of that paperwork is a series of forms or "schedules" that list income, expenses, debts, and assets. An additional form, the Statement of Financial Affairs, or SOFA, asks questions about the state of your finances, recent financial transactions, and items that can't go on other schedules. 

You'll fill out the SOFA if you file a Chapter 7, Chapter 11, or a Chapter 13 case. Although the form looks deceptively simple with its "check the box" format and seemingly straightforward questions, it must be completed with care to ensure that you've disclosed the information it seeks completely and accurately. Below is an overview of what you'll see on the form. For specific instructions refer to the form or to this instruction booklet offered by the U.S. Courts. 

Please note that changes to the bankruptcy forms went into effect in December 2015. There are now two versions of the SOFA, one for individuals and one for non-individuals (companies).

Since many cases are filed jointly by spouses, most of these questions have spaces for each spouse to answer separately. 

When you've completed the form, you will be asked to sign the form under penalty of perjury. Therefore, if you lie, purposely deceive or are neglectful or reckless in your answers, you can be prosecuted, receive a jail term or a very stiff fine. 

Part 1: Marital Status and Where You Lived Before

Question 1: Current Marital Status

Question 2: During the last 3 years, have you lived anywhere other than where you live now?

Question 3: Within the last 8 years, did you ever live with a spouse or legal equivalent in a community property state or territory

Part 2: Explain the Sources of Your Income

Question 4: Did you have any income from employment or from operating a business during this year or the two previous calendar years?

Question 5: Did you receive any other income during this year or the two previous calendar years?

  • Alimony
  • Child support
  • Social Security or pensions
  • Unemployment
  • Interest, dividends, royalties
  • Lawsiuts
  • Gambling or lottery winnings

Part 3: List Certain Payments You Made Before You Filed for Bankruptcy

Question 6: Are either Debtor 1’s or Debtor 2’s debts primarily consumer debts?

  • If so, you're asked to list any payments you've made in the previous 90 days that total more than $600 to any one creditor. For example: You paid First National Visa three payments of $100 each. These would not have to be listed. But, you paid Royal Motors three payments of $250 each ($750 total). These you must list. 

Question 7: Within 1 year before you filed for bankruptcy, did you make a payment on a debt you owed anyone who was an insider?

  • An insider is a person or an entity you're close to,like relatives, partners, partnerships, businesses of which you are an officer, director, owner, controller managing agency,
  • This is where you'll disclose that you paid your Uncle Larry back that $1,000 loan he gave you. 

Question 8: Within 1 year before you filed for bankruptcy, did you make any payments or transfer any property on account of a debt that benefited an insider?

  • You are also asked to list payments for child support and alimony. 

Part 4: Identify Legal Actions, Repossessions and Foreclosures

Question 9: Within 1 year before you filed for bankruptcy, were you a party in any lawsuit, court action, or administrative proceeding?

Question 10: Within 1 year before you filed for bankruptcy, was any of your property repossessed, foreclosed, garnished, attached, seized, or levied?

Question 11:  Within 90 days before you filed for bankruptcy, did any creditor, including a bank or financial institution, set off any amounts from your accounts or refuse to make a payment because you owed a debt?

Question 12: Within 1 year before you filed for bankruptcy, was any of your property in the possession of an assignee for the benefit of creditors, a court-appointed receiver, a custodian, or another official?

Part 5: List Certain Gifts and Contributions

Question 13. Within 2 years before you filed for bankruptcy, did you give any gifts with a total value of more than $600 per person? 

Question 14: Within 2 years before you filed for bankruptcy, did you give any gifts or contributions with a total value of more than $600 to any charity? 

  • This includes your church tithes.

Part 6: List Certain Losses

Question 15: Within 1 year before you filed for bankruptcy or since you filed for bankruptcy, did you lose anything because of theft, fire, other disaster, or gambling?

Part 7: List Certain Payments or Transfers 

Question 16:  Within 1 year before you filed for bankruptcy, did you or anyone else acting on your behalf pay or transfer any property to anyone you consulted about seeking bankruptcy or preparing a bankruptcy petition?

  • This includes the attorney you hired to file this bankruptcy case and the company you paid for your credit counseling session.

Question 17: Within 1 year before you filed for bankruptcy, did you or anyone else acting on your behalf pay or transfer any property to anyone who promised to help you deal with your creditors or to make payments to your creditors?

Question 18: Within 2 years before you filed for bankruptcy, did you sell, trade, or otherwise transfer any property to anyone, other than property transferred in the ordinary course of your business or financial affairs?

  • Did you give your brother that boat that's been sitting in your backyard? Did you donate that old Chevy to the Cars for Kids program? 

Question 19: Within 10 years before you filed for bankruptcy, did you transfer any property to a self-settled trust or similar device of which you are a beneficiary?

Part 8: List Certain Financial Accounts, Instruments, Safe Deposit Boxes, and Storage Units 

Question 20: Within 1 year before you filed for bankruptcy, were any financial accounts or instruments held in your name, or for your benefit, closed, sold, moved, or transferred?

  • List all financial accounts, including bank accounts, investment accounts, CD's, IRA's, 401ks.

Question 21: Do you now have, or did you have within 1 year before you filed for bankruptcy, any safe deposit box or other depository for securities, cash, or other valuables?

Question 22:  Have you stored property in a storage unit or place other than your home within 1 year before you filed for bankruptcy?

Part 9: Identify Property You Hold or Control for Someone Else 

Question 23:  Do you hold or control any property that someone else owns? Include any property you borrowed from, are storing for, or hold in trust for someone.

  • Did your mom move in with you last year and bring all her stuff with her? Are you borrowing your best friend's spare car? 

Part 10: Give Details About Environmental Information 

  • Usually, we only see these questions at issue for people who've operated a gas station, or had a business that may use chemicals or produce waste that needs special handling. 

Question 24:  Has any governmental unit notified you that you may be liable or potentially liable under or in violation of an environmental law?

Question 25: Have you notified any governmental unit of any release of hazardous material?

Question 26:  Have you been a party in any judicial or administrative proceeding under any environmental law? Include settlements and orders.

Part 11: Give Details About Your Business or Connections to Any Business 

Question 27:  Within 4 years before you filed for bankruptcy, did you own a business or have any of the following connections to any business?

  • Include sole proprietorships, partnerships, corporations for which you were an officer, director, or managing executive, or owner of  at least 5%. 

Question 28: Within 2 years before you filed for bankruptcy, did you give a financial statement to anyone about your business? Include all financial institutions, creditors, or other parties.

 

Updated January 2018 by Carron E. Nicks