Do I Have To List It In My Bankruptcy?
A common question from clients preparing to file bankruptcy is, "Do I have to list it?" "It" can be an item of property, a financial obligation, a source of income, or even a reoccurring bill. The simple answer is, "Yes!" You must list all of your assets, debts, income and expenses. The bankruptcy process expects and relies on honest disclosures from the debtor. These financial disclosures are made under oath and threat of perjury. You must disclose everything.
Disclosing ownership of an asset doesn't mean you will lose that property. Statistically, only four percent of all
Chapter 7 bankruptcy cases have an asset that is turned over to the trustee. Federal and/or state exemption laws protect most property during bankruptcy, however property exemptions are only recognized when the asset is listed and the legal exemption is properly claimed. An asset that is concealed during your bankruptcy case may not receive the full protection of the exemption laws.
Likewise, disclosing income does not mean that you will be forced into a Chapter 13 bankruptcy where you will repay some or all of your debts. Many people pass the
means test without much effort. In the remaining cases, most only require small adjustments. Disclose all of your income early during the bankruptcy process, and your attorney can discuss your legal options for discharging unsecured obligations without filing a Chapter 13 repayment case.
Intentionally failing to disclose a debt means that the debt may not be discharged. Unfortunately, it also means that you have committed perjury since you attested to having listed all of your debts. Perjury is a federal crime, and you may be denied a discharge. Occasionally a debtor wants to omit a creditor from the bankruptcy case. Your attorney can help you with this decision. For instance, a credit card with a zero balance is not a debt and there is no disclosure requirement. In theory, since the credit card company is not listed as a creditor, it does not receive notice of the bankruptcy, and the credit relationship is not disturbed. Realistically, the credit card company will discover the bankruptcy independently and may restrict the account.
When it comes to bankruptcy it is important to be completely honest with your attorney. Your attorney will advise you on making the best disclosure decisions while staying within the legal requirements of the bankruptcy laws. Don't hide a financial fact! Discuss it with your attorney and protect your legal rights.
Contact the experienced Chicago bankruptcy attorneys at Glanzer & Associates, P.C. at 1-312-644-2227 to discuss your specific situation, and to schedule your free, in-person consultation.