The Importance of Disclosing Assets
The purpose of filing for bankruptcy is to obtain a bankruptcy discharge, and with that discharge, a fresh start. However, bankruptcy law was designed to allow creditors to be paid back to the extent possible. As a result, debtors must disclose all of their assets and debts in their initial bankruptcy filing. Those who fail to list their assets or property for the purposes of avoiding repayment or defrauding creditors are subject to harsh penalties. The importance of disclosing assets cannot be overstated. An Alabama bankruptcy attorney at Grainger Legal Services can draft your bankruptcy petition and work with you to make sure your bankruptcy results in the most complete discharge possible.The Importance of Disclosing Assets
In a Chapter 7 bankruptcy, you give up your non-exempt assets in exchange for a discharge of your dischargeable debts. Therefore, when you ask the bankruptcy court to discharge your debts, you are required to also list all of your assets and debts. You must sign an oath under penalty of perjury attesting to the truth and accuracy of this disclosure. The court relies on your schedule of real and personal property in order to determine whether any assets may be sold to repay creditors. It also asks whether all of your assets were listed at the meeting of creditors.
Those who hide assets from the bankruptcy court and are caught will not be entitled to a discharge. This means they will continue to be liable for their debts, even though the bankruptcy case moves forward. Instead of a dismissal of the whole case with an opportunity to file again for discharge, any property that was not listed and was not exempt from being sold will still be part of the bankruptcy estate, and liquidated to pay creditors, while the debtor remains liable for the debts.
If the bankruptcy trustee learns that you hid assets, he or she can file an adversary proceeding to let the court know. The court will examine your case, and if it determines you concealed assets in order to delay or defraud creditors, your discharge will be denied.
After you have received a discharge, if a trustee finds out that you did not disclose assets but hid them with fraudulent intent, the trustee is likely to ask the court to revoke the discharge. A trustee can do this either before the case is closed, or up to a year after the discharge date. Moreover, you will not be able to discharge in later bankruptcies the debts you listed in a bankruptcy when your discharge was denied or revoked for a failure to disclose assets.
In addition to losing the ability to obtain a discharge in your bankruptcy case, you may face criminal fines and imprisonment for up to five years for concealing property. Many debtors are afraid to disclose all of their assets for fear of losing them. However, the consequences of failing to disclose your assets in a bankruptcy if you are caught are far greater than the loss of any particular asset.Explore Your Options with a Bankruptcy Attorney in Alabama
At Grainger Legal Services, we understand the importance of disclosing assets and can prepare your schedules to make sure that you have made truthful and accurate disclosures. Alabama bankruptcy lawyer Charles Grainger can work to make sure you can receive the greatest possible discharge of your debts. We have offices in Troy, Prattville, and Montgomery. Call us at (334) 260-0500 or contact us online to schedule a free consultation with a debt relief attorney.