Tell the Whole Truth When You File For Bankruptcy

Don't get clever and try to hide property. It will come back to haunt you.

You sign your bankruptcy papers under penalty of perjury, swearing that everything in them is true. One of the things you're swearing to is that your forms are complete, because the forms ask you to list "all" property and debts. Filing incomplete or inaccurate bankruptcy forms can lead to your case being dismissed -- or worse, if the court thinks you omitted information or made false statements intentionally.

The law is not supposed to punish those who make one or two honest mistakes. If you accidentally leave something off your papers or misstate something on your forms, you can correct your papers or explain the mistake to the trustee. But if you inadvertently leave out so much that it appears that you were careless, the court can find that your actions demonstrate an indifference to the truth and can dismiss your case on that basis.

If you deliberately attempt to hide assets or use a false social security number, it will probably come back to haunt you more profoundly than your current debt crisis.

List Creditors Even If You Don't Think You Owe Them a Cent

Bankruptcy can't help you if you hide information. If you fail to list creditors, the debts you owe them may not be wiped out by your bankruptcy discharge. So if there is someone who claims you owe them money, be sure to list them on your bankruptcy forms even if you don't think you owe them anything. You can indicate that the debt is "disputed." If the debt is already the subject of a pending lawsuit, the debt can be listed as "contingent" -- that is, it depends on how the lawsuit comes out.

When your bankruptcy is finished, you will no longer owe any debts that have been discharged. If a disputed debt is discharged, the entire dispute will be irrelevant. The creditor will be legally barred from collecting anything more from you regardless of who is right.

Don't Omit Creditors Just Because You Like Them

If Aunt Zelda loaned you money and it wasn't a gift, she's a creditor and needs to be listed on your forms.

You may feel bad about the fact that bankruptcy will leave certain creditors with nothing, especially if you have a personal or long-standing business relationship with the creditor. But bankruptcy doesn't allow you to play favorites. In fact, a central purpose of bankruptcy is to make sure that all of your creditors get their fair share of what you have, and that certain obligations (like child support) are not shortchanged. If the bankruptcy trustee learns that you've omitted creditors from your list, you'll have to add them, and it will raise suspicion about other statements on your forms.

Don't Forget to List Money You May Have Coming to You

Although it's a common mistake, don't forget to list assets you may have coming to you when you are listing your property. A few examples of property that's easy to overlook:

• an inheritance from a recently deceased relative that you have not yet received.
• stock options, trust funds, or tax refunds.
• pensions, retirement funds, annuities, and life insurance.
• judgments from lawsuits you've filed or could file, arising from a personal injury or other matter.

All of these are examples of property that you must list on your forms. You may get to keep some or all of this property by claiming it as exempt, but you must list it so that the trustee has a complete picture of all of your finances.

Don't Underestimate Your Living Expenses

Many of us spend more than we think we do. Perhaps that's what got you into money troubles in the first place. When you file for bankruptcy, it's no time to deceive yourself. It will only hurt your case. Take the time to fully include all of your expenses on your bankruptcy papers.

If you underestimate your expenses, the trustee might conclude that you have enough extra income each month to support a Chapter 13 repayment plan, and could prevent you from filing a Chapter 7 bankruptcy.

Don't Deliberately Hide Assets or Other Financial Details

If you deliberately fail to disclose property, omit material information about your financial affairs, or use a false Social Security number to hide your identity as a prior filer, and the court discovers your action, your case will be dismissed and you may be prosecuted for fraud.

The punishment for fraud is serious: Jail time is not unusual for those who try to hide property from the court and get caught. Take note of these recent actions.

• A debtor in Massachusetts went to jail for failing to list on his bankruptcy papers his interest in a condominium and $26,000 worth of jewelry.
• Another Massachusetts debtor is serving time for listing her home on her bankruptcy papers as worth $70,000 when it had been appraised for $116,000.
• A Pennsylvania debtor omitted from her papers $50,000 from a divorce settlement and was sentenced to time in prison.
• A debtor in Ohio was imprisoned for using a false Social Security number.

Some courts -- most notably the Central District Court of California, based in Los Angeles -- have developed highly sophisticated programs for locating fraudulent filers. These programs involve scrutinizing bankruptcy papers, dismissing cases when the debtor fails to file all papers within 15 days after filing the petition, and issuing orders barring a debtor from refiling for 180 days after a case has been dismissed.

Florida Personal Bankruptcy Lawyer

With the introduction of new bankruptcy laws in October of 2005, filing for personal bankruptcy has become more difficult. At the Law Offices of Paul Lee, we utilize over 40 years of legal experience in order to address your specific credit card debt and other debt relief needs. Our firm can help you understand which type of bankruptcy listed below is best for you, if any.

Chapter 7 Bankruptcy

This type of personal bankruptcy is dedicated to the dismissal of debts that are contained within the bankruptcy petition. In many cases, a Chapter 7 filing is referred to as a “fresh start” bankruptcy. Since each client’s situation is unique, each bankruptcy action is different. All of your debts may not be eligible for Chapter 7 bankruptcy. Special circumstances often apply.

Chapter 13 Bankruptcy

The Chapter 13 type of bankruptcy involves the reorganization of your debt. Current and future financial situations are taken into account when determining the best way in which the debts can be repaid. A steady and reliable income often aids in the repayment of these debts, and facilitates the filing of Chapter 13 bankruptcy.

Occasionally, clients may benefit from both types of bankruptcy. In this instance, we can assist you in understanding how to go about determining which debts will need repayment and which could possibly be dismissed.

Contact a Chapter 7 bankruptcy lawyer at the Law Offices of Paul Lee today. We offer a free initial consultation so you can discuss your specific situation and requirements with an attorney at our firm. Do not be afraid to take back control of your financial situation. Get in touch with our office today. We welcome our clients to tell their creditors to call our firm.

We help people file for bankruptcy relief under the Bankruptcy Code.

The Law Offices of Paul Lee represent personal bankruptcy clients located throughout Central Florida, including the communities of Tavares, Ocala, Lake Mary, Sanford, Orlando, Bushnell, Leesburg, Lake County, Marion County, Sumter County, Seminole County, and all of the surrounding areas.