Filing Bankruptcy?
Disclose Everything, Hide Nothing
Hiding property from a bankruptcy
court could come back to haunt you.
Your bankruptcy papers are signed under penalty of
perjury, so you are swearing that everything in them is
true. One of the things you're swearing to is that your
forms are complete, because the forms ask you to list "all"
property, income, and debts. Filing incomplete or inaccurate
bankruptcy forms can lead to your case being dismissed -- or
worse, if the court thinks you omitted information or made
false statements intentionally.
The law is not supposed to punish those who make one or
two honest mistakes. If you accidentally leave something off
your papers or misstate something on your forms, you can
usually correct your papers or explain the mistake to the
trustee. But if you leave out so much that it appears that
you were careless, the court can find that your actions
demonstrate an indifference to the truth and can dismiss
your case on that basis.
If you deliberately attempt to hide assets or use a false
Social Security number, it will probably come back to haunt
you more profoundly than your current debt crisis.
List Every Creditor
Bankruptcy can't help you if you hide information. If you
fail to list creditors, the debts you owe them may not be
wiped out by your bankruptcy discharge. So, be sure to list
every person who claims that you owe them money -- even if
you don’t think you owe them a cent. In this situation, you
can indicate that the debt is "disputed." If the debt is
already the subject of a pending lawsuit, the debt can be
listed as "contingent" -- that is, it depends on how the
lawsuit comes out.
When your bankruptcy is finished, you will no longer owe
any debts that have been discharged. If a disputed debt is
discharged, the entire dispute will be irrelevant. The
creditor will be legally barred from collecting anything
more from you regardless of who is right.
Don't Omit Creditors Just Because You
Like Them
Some filers consider omitting creditors whom they like --
such as a relative or a friendly local business person -- to
avoid having that debt wiped out. This is a bad idea, no
matter how honorable your intentions.
Bankruptcy doesn't allow you to play favorites. In fact, a
central purpose of bankruptcy is to make sure that all of
your creditors get their fair share of what you have, and
that certain obligations (like child support) are not
shortchanged. If the bankruptcy trustee learns that you've
omitted creditors from your list, you'll have to add them,
and it will raise suspicion about other statements on your
forms.
Include Money You May Have Coming to You
When you list your property on the bankruptcy forms, you
must include not only property you have when you file, but
also property that you may have coming to you. Here are some
examples:
- an inheritance from a recently deceased relative
that you have not yet received
- stock options, trust funds, or tax refunds
- pensions, retirement funds, annuities, and life
insurance, and
- judgments from lawsuits you've filed or could file,
arising from a personal injury or other matter.
All of these are examples of property that you must list
on your forms. You may get to keep some or all of this
property by claiming it as exempt, but you must list it so
that the trustee has a complete picture of all of your
finances.
Don't Deliberately Hide Assets or Other
Financial Details
If you deliberately fail to disclose property, omit
material information about your financial affairs, or use a
false Social Security number to hide your identity as a
prior filer, and the court discovers your action, your case
will be dismissed and you may be prosecuted for fraud. The
punishment for fraud is serious: Jail time is not unusual
for those who try to hide property from the court and get
caught.
CONTACT US FOR A FREE
CONSULTATION
732.302.9600
