I recently listened as a bankruptcy trustee grilled a gentleman (not one of my clients) who had stated that he owned no assets: no cash, no checking accounts, no clothes, no car, nothing. As you might expect, it wasn’t true. He had bank accounts, clothes, and other property, though it probably didn’t amount to much. He also drove to work and back, but explained that the car he used was “in my Mom’s name.”
If you are in financial difficulties, you will often get advice from friends and family. You may be told that you can choose what to “include” in your bankruptcy case; that you will lose everything you list; that you should put your belongings in someone else’s name; or that you can “just say” that something belongs to them or “put it down as … .”
All of this is bad advice. The Bankruptcy Code allows you to have a fresh start, but the price is an honest and complete disclosure–under oath–of all of your assets and liabilities. Giving inaccurate or incomplete information can result in dismissal of your bankruptcy case, denial of discharge, and even criminal penalties.
The advice is also bad because the Bankruptcy Code does not require debtors to surrender everything they own when they file. Many of the common necessities are exempt assets, which you can keep even in bankruptcy. Legitimate planning can also improve your situation in bankruptcy. For such planning to succeed, it should be designed with your Arizona bankruptcy attorney so that a trustee with all of the facts (many of which are required to be disclosed at the outset) would conclude that you have complied with the Bankruptcy Code.
In short, the gentleman who listed no assets may face serious consequences solely because he was trying to hide assets which, if properly disclosed, he may have been entitled to keep.
Arizona bankruptcy lawyer Kelly G. Black offers a free bankruptcy consultation in which to discuss your specific situation. He can be reached at (480) 559-8131 or (877) 612-9872.