There are at least three excellent reasons why should be very circumspect about reporting your assets accurately when you file for bankruptcy. The failure to list assets can have a serious impact on your case and your future ability to file. Be careful to advise your bankruptcy attorney of all assets, regardless of how insignificant the asset may seem. Consider these important reasons to accurately list your assets:
First, and perhaps most importantly, inaccurately reporting assets could land you in jail. Since almost everything you turn in in connection with your bankruptcy will bear your signature, fraudulent misrepresentation on these forms is perjury. At a guess, you're not trying to go to jail, right? Thus, make sure those forms are accurate!
Second, if your bankruptcy trustee catches on to any funny business with your assets, he could ask the court to deny your discharge. This one doesn't sound much better than jail time: you'll have a bankruptcy on your record, you'll lose the ability to declare bankruptcy for the next several years, and you get nothing for your troubles. Remember that a lot of the actions you take in connection to your assets can easily be discovered by a prudent trustee; a fraudulent transfer of title, for example, will probably be on the public record, where anyone, including your trustee or one of your creditors, could look it up. Playing games here is both wrong and foolish.
Third, accurately reporting an asset could actually help you keep it in the end. Remember that legal technicalities can shape the broad strokes of your case, and make those technicalities work for you! Here are a couple of situations in which your accurate reporting of assets can help you keep them:
One scenario involves an asset you claim as exempt. When you claim an asset as exempt and accompany it with an accurate description, the trustee and your creditors only have 30 days following the 341 meeting of the creditors to raise an objection. If they miss this deadline, the property becomes exempt even if the court could have challenged the exemption of that asset by objecting in a timely manner. This one can really turn out in your favor, and it is not a trick, it's the way bankruptcy is supposed to provide efficient, workable solutions both for creditors and borrowers.
Even if you're not claiming anÂ asset as exempt, accurately describing it and listing it could help you keep it if your trustee fails to sell it while your case is still open. If this happens, the asset is considered "abandoned," and it means that when the case closes,Â the asset becomes yours once more. This is a great possibility you definitely want to reserve for yourself, butÂ on the other hand, not reporting accurately could really hurt you. If you do not accurately describe an asset, your case could be reopened even years down the line. Imagine getting all the way through the bankruptcy process and beginning to rebuild your life only to have the case barge back into play years down the line. What a headache! Thus, keep this rule of thumb close when you file: make sure you accurately list your assets. Hire a bankruptcy attorney who will assess your total financial situation and advise you on protecting all of your assets.
From: The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) +1-919-646-2654, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.