Should I disclose All Assets In My Bankruptcy?
Being quoted in the Wall Street Journal Bankruptcy Beat is a first for me, however I wish it was under better circumstances for my former client. The issue that has arisen in that case can be easily avoided if a debtor understands that at the time of filing for bankruptcy, ALL ASSETS, no matter their assumed value or potential for value must be disclosed in a consumer bankruptcy case. If a consumer happens to forget to list an asset for one reason or another, the debtors bankruptcy schedules may be amended to make the disclosure upon realization that the assets should have been listed. I emphasize with all of my clients that full disclosure is required in order to avoid any issues in their bankruptcy case which will allow the consumer to receive a bankruptcy discharge in a timely fashion and allow for that bankruptcy discharge to be permanent.
If an asset was not listed on a consumers bankruptcy case and the consumer goes on to receive a discharge, but later realizes they were supposed to list an asset, the US Trustee or local trustee may reopen the debtors bankruptcy case to investigate the value of the non disclosed assets and determine if the debtors creditors were prejudiced in any way and also determine whether the consumer was attempting to intentionally defraud creditors by not listing an asset. In order to prove the consumer committed fraud by not listing an asset, the US Trustee would have to prove that the consumer bankruptcy filer had intent to not list a particular asset at the time of bankruptcy filing and it would most likely have to have some value to show that creditors were losing out on the disbursement of potential non exempt assets of the the debtors bankruptcy estate.
Bankruptcy fraud is a Federal crime and is no joke. When you go to court at your 341 meeting of creditors (your only court appearance most likely), your local trustee will give a speech and emphasis the importance of full disclosure, give some examples of commonly forgotten assets that need to be listed in your bankruptcy schedules and describe some of the penalties for non compliance. These penalties may include a revocation of your bankruptcy discharge, a fine of up to $500,000 or even imprisonment for up to 5 years in extreme cases. Most debtors simply do not have any non exempt assets that they could be hiding or if they forget to list something, debtors can amend their bankruptcy schedules in order to disclose the missing asset and give full disclosure. Proving that someone intended to defraud creditors due to not listing an asset is no easy task, especially if the debtor makes the proper disclosure upon the realization that certain assets should have been disclosed. In order to receive a bankruptcy discharge, debtors must be willing to be honest and give full disclosure of their financial situation. It is a small sacrifice for the the potential benefits that filing bankruptcy can provide which can give many people a fresh financial start moving forward in life.
If you have additional questions please contact Symmes Law Group at 206-682-7975