16 Jul All properties must be disclosed when filing bankruptcy
By Atty. Crispin Caday Lozano
Q. When you have decided that you want to file bankruptcy, the first question that pops into your mind is what information to disclose in the bankruptcy petition?
A. Using the golden rule in bankruptcy “disclose everything and hide nothing” there are five major types of information that needs to be disclosed such as your:
5. Financial Affairs
- Why is it extremely important disclosing this information in your bankruptcy petition?
- A. When you sign your bankruptcy petition, you are swearing under penalty of perjury, that everything written on your paperwork is true and correct. One of the things you are swearing to is that your forms are complete, because the forms ask you to list and disclose everything (“all” property, income, and debts). Filing incomplete or inaccurate bankruptcy petition can lead to your case being dismissed. If the court finds you omitted important information or made false statement intentionally, you may be liable for fraud. If you purposely attempt to hide your assets, misstate your income , or use a false social security number, it will probably come back to haunt you more than your current debt and financial crisis.
Q. What happen if I have forgotten to include certain property in good faith?
A. If you accidentally missed something off your papers or misstate something on your forms, you can usually correct and amend your papers or explain the mistake to the trustee. The law is not supposed to punish those who make one or two honest mistakes. However, if you leave out so much that it appears that you were careless, the court can find that your actions show an indifference to the truth and can dismiss your case on that basis.
Q. Can I exempt one card company or my relative in my List of Creditors?
A. Bankruptcy cannot help you if you conceal information. If you fail to list creditors, the debts you owe them may not be wiped out by your bankruptcy discharge. So, review your list carefully and make 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, all your debts will be discharged and you will no longer owe them. If a disputed debt is discharged, the entire dispute will be irrelevant. The creditor will be legally barred from collecting anything more from you.
Some filers consider excluding creditors whom they like — such as a relative or a friendly local business person — to avoid having that debt wiped out or a certain credit card company just because he wants to continue using the account for daily needs. This is called “creditor preference”. This is a bad idea, no matter how worthy 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) has to be paid. 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 bankruptcy forms.
- Q. Do I have to include money that I am expecting to receive after filing bankruptcy?
A. When listing your property on the bankruptcy forms, you must include not only the properties you have upon filing, but also properties that you are expecting to receive later after filing. This will allow the trustee to decide if the money you will receive are exempt properties of property of the bankruptcy estate. Here are some examples:
- 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,
- judgments from lawsuits you’ve filed or could file, and
- claims arising from a personal injury or other matter.
Note: This is not a legal advice. You should consult with a bankruptcy attorney about your specific circumstances.