The following disclosures are required pursuant to 11 U.S.C. §527. If you do not understand these disclosures, you should seek legal advice or conduct the necessary research to educate yourself.

NOTE: YOU MAY BE CONSIDERED AN "ASSISTED PERSON" ACCORDING TO THE BANKRUPTCY CODE.

An assisted person is "any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000." 11 U.S.C. §101(3).



Section 527(a)(2) requires the following disclosure:

(A) all information that the assisted person is required to provide with a petition and thereafter during a case under this title is required to be complete, accurate, and truthful;
(B) all assets and all liabilities are required to be completely and accurately disclosed in the documents filed to commence the case, and the replacement value of each asset as defined in section 506 must be stated in those documents where requested after reasonable inquiry to establish such value;
(C) current monthly income, the amounts specified in section 707(b)(2), and, in a case under chapter 13 of this title, disposable income (determined in accordance with section 707(b)(2)), are required to be stated after reasonable inquiry; and
(D) information that an assisted person provides during their case may be audited pursuant to this title, and that failure to provide such information may result in dismissal of the case under this title or other sanction, including a criminal sanctions.

VALUATION OF ASSETS:

According to Section 527(c), assets should be valued at replacement value as of the date of filing for bankruptcy without deducting for costs or sale or marketing. Replacement value is "the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined." 11 U.S.C. §506.


CURRENT MONTHLY INCOME:

According to Section 101(10A), current monthly income is as follows:
 
(A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor’s spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on:

(i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debtor files the schedule of current income required by section 521(a)(1)(B)(ii); or
(ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(1)(B)(ii); and

(B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor’s spouse), on a regular basis for the household expenses of the debtor or the debtor’s dependents (and in a joint case the debtor’s spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism.

DISPOSABLE INCOME:

Disposable income is calculated by subtracting allowed monthly expenses as established by the Internal Revenue Service from the debtor’s current monthly income. 11 U.S.C. §707(b)(2)(A) governs what expenses are permitted and states in part,

(2)(A)(ii)(I) The debtor’s monthly expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor’s actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides, as in effect on the date of the order for relief, for the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case, if the spouse is not otherwise a dependent. Such expenses shall include reasonably necessary health insurance, disability insurance, and health savings account expenses for the debtor, the spouse of the debtor, or the dependents of the debtor. Notwithstanding any other provision of this clause, the monthly expenses of the debtor shall not include any payments for debts. In addition, the debtor’s monthly expenses shall include the debtor’s reasonably necessary expenses incurred to maintain the safety of the debtor and the family of the debtor from family violence as identified under section 309 of the Family Violence Prevention and Services Act, or other applicable Federal law. The expenses included in the debtor’s monthly expenses described in the preceding sentence shall be kept confidential by the court. In addition, if it is demonstrated that it is reasonable and necessary, the debtor’s monthly expenses may also include an additional allowance for food and clothing of up to 5 percent of the food and clothing categories as specified by the National Standards issued by the Internal Revenue Service.

(II) In addition, the debtor's monthly expenses may include, if applicable, the continuation of actual expenses paid by the debtor that are reasonable and necessary for care and support of an elderly, chronically ill, or disabled household member or member of the debtor’s immediate family (including parents, grandparents, siblings, children, and grandchildren of the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case who is not a dependent) and who is unable to pay for such reasonable and necessary expenses.

(III) In addition, for a debtor eligible for chapter 13, the debtor’s monthly expenses may include the actual administrative expenses of administering a chapter 13 plan for the district in which the debtor resides, up to an amount of 10 percent of the projected plan payments, as determined under schedules issued by the Executive Office for the United States Trustees.

(IV) In addition, the debtor’s monthly expenses may include the actual expenses for each dependent child less than 18 years of age, not to exceed $1,500 [adjusted to $1,650] per year per child, to attend a private or public elementary or secondary school if the debtor provides documentation of such expenses and a detailed explanation of why such expenses are reasonable and necessary, and why such expenses are not already accounted for in the National Standards, Local Standards, or Other Necessary Expenses referred to in subclause (I).

(V) In addition, the debtor’s monthly expenses may include an allowance for housing and utilities, in excess of the allowance specified by the Local Standards for housing and utilities issued by the Internal Revenue Service, based on the actual expenses for home energy costs if the debtor provides documentation of such actual expenses and demonstrates that such actual expenses are reasonable and necessary.

(iii) The debtor’s average monthly payments on account of secured debts shall be calculated as the sum of: (I) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition; and

(II) any additional payments to secured creditors necessary for the debtor, in filing a plan under chapter 13 of this title, to maintain possession of the debtor’s primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor’s dependents, that serves as collateral for secured debts;

divided by 60.

(iv) The debtor’s expenses for payment of all priority claims (including priority child support and alimony claims) shall be calculated as the total amount of debts entitled to priority, divided by 60.

LISTING CREDITORS:

Debtors are required pursuant to the Bankruptcy Code to list all liabilities on the bankruptcy petition.  As such, all creditors should be listed on the appropriate bankruptcy schedule. 

Creditors should be listed according to the type of the debt owed. There are three types of debts: Secured, Priority, and Unsecured. 

Creditors holding debts that are secured by property of the debtor are secured creditors. These creditors can repossess the collateral in the event the debtor defaults on the loan. Mortgage lenders and vehicle lenders are the most common secured creditors. Homeowner associations and the county real property tax assessor are other secured claimants. Secured debts are governed by Section 506. Secured creditors are listed on Schedule D of the bankruptcy petition.

Priority creditors are creditors who have certain types of debt such as that owed to the Internal Revenue Service, a government agency, or a domestic support claimant. Priority debts are described within 11 U.S.C. §507. Priority creditors are listed on Schedule E of the bankruptcy petition.

Creditors that are not secured by property of the debtor are considered unsecured creditors. Credit card companies, payday loan companies, and medical service providers are the most common unsecured creditors. Unsecured creditors are listed on Schedule F of the bankruptcy petition.

AMOUNT OF DEBT OWED:

The best way to determine the amount owed to creditors is to refer to a statement or invoice issued by the creditor. The creditor can also be contacted directly for the total balance.

NOTICING:

Creditors’ addresses should be listed in accordance with the Bankruptcy Code and other applicable law.

11 U.S.C. §342(c)(2)(A) states,

If, within the 90 days before the commencement of a voluntary case, a creditor supplies the debtor in at least 2 communications sent to the debtor with the current account number of the debtor and the address at which such creditor requests to receive correspondence, then any notice required by this title to be sent by the debtor to such creditor shall be sent to such address and shall include such account number.

Also, 11 U.S.C. §342 (e)(1) states,

In a case under chapter 7 or 13 of this title of a debtor who is an individual, a creditor at any time may both file with the court and serve on the debtor a notice of address to be used to provide notice in such case to such creditor.

Further, 11 U.S.C. §342 (g)(1) states,

Notice provided to a creditor by the debtor or the court other than in accordance with this section (excluding this subsection) shall not be effective notice until such notice is brought to the attention of such creditor. If such creditor designates a person or an organizational subdivision of such creditor to be responsible for receiving notices under this title and establishes reasonable procedures so that such notices receivable by such creditor are to be delivered to such person or such subdivision, then a notice provided to such creditor other than in accordance with this section (excluding this subsection) shall not be considered to have been brought to the attention of such creditor until such notice is received by such person or such subdivision.

Local Rule 4009 entitled "Creditor’s Designation for Receiving Notice" is also applicable. It reads,

(a) If a creditor has designated a person or organizational subdivision in accordance with 11 U.S.C. § 342(g), the creditor must file with the court a document that (i) identifies the person or subdivision so designated; and (ii) describes the procedures it is using to ensure that the designated person or subdivision receives all properly addressed notices.

(b) If a creditor is not an individual and does not file a document substantially complying with subsection (a) above, or does not maintain any formal procedures for receiving notices, then notice to the creditor will be deemed effective if it would satisfy the provisions of Nev. Rev. Stat. § 104.1201.27.


To prevent a creditor from later claiming it did not receive proper notice of the bankruptcy case and thus did not have an opportunity to object to a debtor’s case, it is highly recommended to notice each creditor at the address(es) that it wants to receive correspondence. Most creditors do not accept correspondence at payment addresses. Some creditors have special departments that process bankruptcy notices and documents. It is best to comply with any requests to receive bankruptcy notices at a particular address or department.

EXEMPTION OF PROPERTY:

Debtors are entitled to exempt certain property that they own pursuant to bankruptcy and/or exemption law subject to certain restrictions and limitations. Depending on the domicile requirements pursuant to 11 U.S.C. 522(a)(3)(A), debtors may be required to apply the federal exemptions found within Section 522. If a debtor satisfies the domicile requirements and if the state of domicile has opted out of the federal exemptions, then the debtor may claim the applicable state exemptions. The exemption statutes vary from state to state. Further research on the part of the unrepresented debtor(s) will be necessary. 

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