An asset ranges from real estate, personal property such as vehicles and bank accounts, businesses, lawsuits you have filed and inheritances. Even future income is considered an asset. One of the biggest mistakes that a person can make when filing for bankruptcy is not disclosing all of their assets thinking that if it is not listed it will not be considered. This is very much illegal and comes with serious repercussions.
As the Debtor, you will be signing your bankruptcy petition under penalty of perjury stating that everything in the petition is correct to the best of your knowledge. The Bankruptcy Trustee will be reviewing your petition, asking your questions under oath at the 341(a) Meeting of Creditors, and likely conducting their own due diligence to determine whether all assets have been properly listed and at the right values. In addition to listing your assets completely, it is important to value them reasonably, not based on emotional value or undervaluing them to lower the Trustee’s interest in your assets. For example, if you were to list your residence at $600,000 when in reality Zillow.com shows it to be listed at $850,000, the Trustee will have a heightened interest in your property due to the discrepancy and will move fast to retain a real estate agent to list your property for sale in order to repay your creditors.
It is pertinent that you disclose all your assets and their values to your bankruptcy attorney at consult and during the preparation of your case to ensure that we are able to properly advise you and exempt (protect) your assets from liquidation. A common pitfall is when Debtor believes that if the Trustee decides to liquidate their unprotected (unexempt) asset that they can simply withdraw or dismiss their bankruptcy petition and get out of the case. When the Trustee determines there are assets to be liquidated, the chances of the Trustee abandoning his/her interest in the asset are extremely low as they step into your shoes as the owner of the assets during the bankruptcy, preventing the dismissal of the case so they can administer the asset.
Should it be determined by the Trustee and Bankruptcy court that you intentionally did not disclose your assets, the consequences could be losing your discharge and even your property. Bankruptcy crimes are subject to fines and up to five years in prison. It is important that you are honest with your lawyer and the trustee. The trustee handling your case is a third party and will not be lenient with you if you break the law. Disclosing all of your assets will give you a greater chance at protecting them through exemption. It is important to disclose all your assets so we can properly advise you on when to file and how best to exempt your assets. Contact Bereliani Law Firm today to find out which of your assets can be legally exempted and what your options are if bankruptcy is too risky for you.