Filing for bankruptcy is a serious decision. Nobody should walk into it lightly or disregard the regulations that surround it. When you file for bankruptcy, you want to heed what the court says and listen to your attorney if you have one. What happens if you don’t list all of your property? Can you omit any of your assets or property?
Omitting Property
Federal regulations require you to list all of your property when you file for bankruptcy. If you don’t, then the trustee may discover that you have an asset during the process. If this happens, he or she has the authority to take your property and liquidate it to pay your creditors. You do not have to list property for it to be taken. There are assets that are exempt, though. For instance, you do not have to give up your home, but you still have to list it. Be on the safe side and list all of your property and assets when you’re filing for bankruptcy.
Consequences of Omitting Property
When you don’t list property, it doesn’t stop it from being seized. Consequently, it might actually ruin your entire case. The courts can decide to deny the discharge of your debts and your bankruptcy case can end there. With the end of your case also comes the end of any protection against creditors. It’s far easier to list your assets than to suffer through the consequences. While you may be able to reopen a bankruptcy case, this isn’t always the case.
Forgetting Property
Intent does matter — if you deliberately omit the assets from your bankruptcy, this is perjury and could end up being a criminal charge. If you forgot an asset or a piece of property, or if you wrongly thought that you didn’t have to list it, the court may decide to give you a chance to correct it. The court will look to see if you made an honest mistake or if you were trying to hide something from them.
During your bankruptcy case, it is crucial that you stay completely honest and transparent. Make sure to list all of your property, even if it is something that you don’t think that you will have to give up. If you deliberately hide information, you could wind up facing a denial of discharge or criminal charges. To understand what you have to list and why, you should consult with a bankruptcy lawyer, like a bankruptcy lawyer in Memphis, TN, as soon as possible.
Thanks to Darrell Castle and Associates, PLLC for their insight into the dangers of omitting property when filing for bankruptcy.