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Simple English definitions for legal terms
statement of financial affairs
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A quick definition of statement of financial affairs:
A statement of financial affairs is a document that someone who owes money (either an individual or a company) has to fill out. It asks questions about their financial situation, like if they've gone bankrupt before, where they have bank accounts, and how much money they owe. This helps the people they owe money to understand their current financial status.
A more thorough explanation:
A statement of financial affairs is a document that must be filed by an individual or a corporate debtor when filing for bankruptcy. This document provides information about the debtor's past and present financial status, including any previous bankruptcy, current accounts, and outstanding debts.
For example, if a person files for bankruptcy, they must submit a statement of financial affairs that includes details about their income, expenses, assets, and liabilities. This document helps the bankruptcy court determine the debtor's ability to pay off their debts and make a fair decision about their case.
Another example is when a company files for bankruptcy. In this case, the statement of financial affairs would include information about the company's financial history, such as any previous bankruptcies, current accounts, and outstanding debts. This document helps the bankruptcy court determine the company's financial situation and make a decision about how to proceed with the bankruptcy case.