Overview of the Bankruptcy Statement of Financial Affairs

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Updated on March 22, 2021

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Bankruptcy worksheet — Photo:
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When you file a bankruptcy case, you will probably be amazed at 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, called "schedules," that list income, expenses, debts, and assets.

An additional form, the statement of financial affairs (SOFA), asks questions about the state of your finances, recent financial transactions, and details that don't fit on other schedules.

What Is the SOFA?

The statement of financial affairs, or "SOFA," is a required form in a bankruptcy filing. This form delves into all of your personal matters so that the court can fully grasp the financial situation that is causing you to file.

You'll fill out the SOFA if you file for a Chapter 7, Chapter 11, or Chapter 13 bankruptcy. Although the form looks deceptively simple, with its "check the box" format and seemingly straightforward questions, you should complete it with care to ensure that you've entirely and accurately disclosed the information it seeks.

Note

It helps to read through the form first, and take an inventory of all of the details listed before filling it out.

There are two versions of the SOFA: one for individuals, and one for non-individuals (usually companies). Many cases are filed jointly by spouses, so 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. Take care how you answer the questions and don't exaggerate or omit anything—there are fines, criminal penalties, or both for lying on these forms.

Part 1: Marital Status and Where You Lived Before

Part 1 asks about your status with a spouse, partner, or equivalent. It lists a "legal equivalent of a spouse," recognized as someone who has a relationship with you and is given the legal rights of a spouse under non-federal law.

Question 1: Current marital status

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

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

Note

Community property states are states where both spouses share liability for debt that is accumulated during the marriage.

It is appropriate to answer "Yes" to question three if you've lived with a spouse in Arizona, California, Idaho, Louisiana, New Mexico, Puerto Rico, Texas, Washington, or Wisconsin. You're then asked to fill out Schedule H for co-debtors.

Part 2: Explain the Sources of Your Income

Part 2 requires you to disclose any income sources you have had for the last three years. This includes any work you might have done for which you received payment, whether it was official or not.

All of the blanks must be filled in with income before exclusions or deductions for the previous three years.

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 or other public benefits
Interest, dividends, royalties
Lawsuits
Gambling or lottery winnings

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

You're asked to list any payments you've made in the previous 90 days that total more than $600 to any single creditor. For example, if you paid First National Visa three payments of $100 each, they would not have to be listed, but if you paid Royal Motors three payments of $250 each ($750 total), you'd be required to list them.

An insider is a person or an entity you're close to—relatives, partners, or partnerships. They might be involved in businesses where you are an officer, director, owner, or controller or have management responsibilities.

This is where you'd disclose that you paid your uncle Larry back on that $1,000 loan he gave you. You are also asked to list payments for child support and alimony.

Note

Be sure to include any debts where there was a cosigner also.

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

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

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

Part 4: Identify Legal Actions, Repossessions, and Foreclosures

Part 4 requests information about legal actions you might have been involved in within the last three years. This helps the court determine whether you've been struggling with other costly activities that might have contributed to your need to file for bankruptcy.

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

Question 10: Within one 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 one year before you filed for bankruptcy, was any of your property in 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

In this section, you list any money or other gifts you may have given to someone that reduced your finances. Include church tithes or charitable donations and gifts.

Note

The gift and contribution amounts are total amounts, not a one-time amount. Multiple gifts to one entity over the two-year period previous to filing, that total to $600.01 or more, must be claimed in this section.

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

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

Part 6: List Certain Losses

Situations that might be outside of your control, such as disasters or theft, should be included in Part 6. If you're struggling with an addiction to gambling or another disorder that causes you to go through money excessively, include it here.

Question 15: Within one 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

In Part 7, the courts need to know whether anyone else has tried to help you pay any fees to attorneys or agents for preparing for a bankruptcy filing, or whether you transferred property or money to someone to help you pay your debts.

Question 16: Within one 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?

Note

Assets must be listed here if you've given or sold any to anyone to help you pay debts, or if you've placed any in a trust or other financial instrument where you're the beneficiary.

Question 17: Within one 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 two 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?

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

You list any bank accounts, investments, retirement plans, or other financial instruments you own in Part 8, as well as any that are held for you or for which the intent is to give them back to you.

Note

Sometimes, people who are getting ready to file for bankruptcy store property that they want to keep at a friend or family member's house or in a storage unit or safe deposit box, and don't list it, in an attempt to keep it from being taken. Any property that is held for you by someone else must be listed.

Question 20: Within one 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?

Question 21: Do you now have, or did you have within one 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 one year before you filed for bankruptcy?

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

If you have property that is not yours, such as something borrowed, it should be listed in Part Nine. If your mother-in-law has moved in with you, you should list her things so that they will not be included in the valuation of your assets.

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.

Part 10: Give Details About Environmental Information

If you have owned a business where chemicals or waste were produced or stored, or if you have any products that require special handling, Part 10 is where you list it.

Any proceeding you were involved in that had to do with environmental issues should be stated here.

Note

This portion is generally only filled out by someone who had a business that had potential to cause environmental harm.

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

This part includes any interest you may have in a business. Included are sole proprietorships, partnerships, and corporations for which you were an officer, director, managing executive, or owner with at least a 5% interest.

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

Question 28: Within two 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.

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