“Technically” Is A Word That Can Cause A Lot Of Trouble In Bankruptcy

A lot of bankruptcy debtors use the word “technically” incorrectly and it can get them into a lot of trouble.” Technically; a seemingly innocent word that my bankruptcy clients use all the time, but whenever I hear it I know to be on the lookout. When a bankruptcy client uses this word, they often mean exactly the opposite of what they are saying.

The word means “according to the exact meaning or facts”, but most people use it when the true facts don’t back up what they believe to be true. The conclusion by the debtor that something is “technically” not their property is one that can have disastrous results.

Here are a few examples:

“Technically, it isn’t my money. It is just in my account in my name. I am holding it for my son.”

“Technically, that isn’t my bank account. It is in my name because my mother is old and she needs help paying her bills.”

” Technically, it isn’t my car. I put it in my friend’s name because I needed insurance.”

“Technically, it isn’t my money. I put it in my wife’s account so it wouldn’t be garnished by my creditors.”

“Technically, the car belongs to my daughter but it is in my name because I got the loan/insurance. She made all the payments though.”

“Technically, that isn’t my property. I just haven’t transferred the legal title to my brother after he paid me for it.”

“Technically, it isn’t my house. I inherited it from my father when he died but it hasn’t been put in my name.”

There are two main reasons this one word causes so much trouble in bankruptcy cases.

The first reason is that when a person files a bankruptcy case, they can protect some property, but the property has to be listed correctly in the bankruptcy. The value of the property has to fit under the available exemption laws of bankruptcy cases. If omitted or listed incorrectly, the debtor may lose all rights to the property even if they could have protected it. If a bankruptcy debtor’s attorney knows about the property, she may be able to advise her client how to protect the property, or at least to be able to discuss the ramifications of filing for bankruptcy will have on that property.

Second, when someone signs a bankruptcy petition, they are swearing that all the information in the petition is the truth. If they misinterpret the facts, the information they provide in their Chapter 7, Chapter 13 or Chapter 11 bankruptcy case is inaccurate, in other words untrue. Under certain circumstances this can lead to denial of bankruptcy discharge and/or criminal charges for perjury.

There may be things that can be done to protect the debtor and/or the property if these situations apply. It is very important to reveal all information to your bankruptcy attorney so that she can advise you before your case is filed. If you believe you may have left something off your bankruptcy petition that should have be there, consult your attorney immediately so your documents can be corrected.

It really is important that the bankruptcy petition is technically correct.