A petition that comes back from the attorney covered in corrections, or from the trustee with a list of amendments, usually fails for ordinary reasons. The same handful of mistakes account for most of them. The good news: each has a habit that prevents it.
1. Income that does not add up
Current monthly income for the means test is based on a specific six-month lookback, not on the last paystub. A common error is to use the wrong months, to miss a source of income, or to forget that income from a spouse or from side work still counts in the right places. A second is when the income on the means test, Schedule I and the tax return tell three different stories.
The habit: build the income from the documents, month by month, and reconcile it across forms before you move on.
2. Missing creditors
Debtors tend to forget a doctor's bill, a payday loan, a debt owed to a relative or an old collection account. A creditor left off the schedules may not be bound by the discharge, and omitted debts are a common source of trouble at the 341 meeting.
The habit: pull a credit report, ask the client directly about friends and family, medical providers and repossessions, and compare the creditor list against the statements in the file.
3. Unsupported values
Property is valued on the schedules, and the trustee will test those figures. A vehicle priced by guesswork or a house valued by memory invites questions and amendments.
The habit: keep the source for every value (a valuation printout, a statement, an appraisal) in the file next to the number, and make sure the same asset has the same value on every form.
4. Exemptions chosen by default
Software auto-selects an exemption for each item. It is often reasonable, and not always the best one available. Choosing among them is a legal decision for the attorney.
The habit: treat the software's choice as a proposal. Submit it to the attorney for review and approval, and flag any asset where the equity is close to a limit.
5. An incomplete Statement of Financial Affairs
This form asks about the past: payments to creditors within the lookback period, payments to insiders over a longer one, transfers, gifts, closed accounts, lawsuits and business interests. It is the part debtors answer least carefully and trustees read most closely.
The habit: go through the form with the client's bank statements open, and look for large or unusual transactions that should be on it.
6. Residency and venue slips
Which state's exemptions apply can turn on how long the debtor has lived there, and filing in the wrong district can create delay. A move within the past couple of years deserves a second look.
The habit: ask when the debtor moved, confirm the address history and flag any recent move for the attorney.
7. Typos in the details that must match
Names, Social Security numbers, account numbers and case numbers have to match the documents and the court records. These errors are small, and they cause the most rework.
The habit: read these fields against the source documents, not against the previous screen.
8. Skipping the last read
After hours of data entry, a person stops seeing the page. A final pass with a checklist catches what a tired reread does not. Attorneys use the same approach: see our petition review checklist.
Getting better at this
Accuracy is a skill, and it improves with training and feedback. NAVBA offers Chapter 7 and Chapter 13 certification exams, and members get support, resources and a community of people doing the same work. Yearly members also have access to petition support by email for as long as they remain members. To see everything that is included, read about NAVBA member benefits or join NAVBA.
This article is general information about bankruptcy practice, not legal advice. Local rules, trustee preferences and state law vary, so confirm current requirements for your jurisdiction.
