When you file your bankruptcy case, make sure you have all of your assets listed. Leaving property off of your schedules can get you in trouble with the court and, in some cases, can make you and your lawyer look downright silly.
For example, we all know used clothing isn’t worth anything. However, if you don’t list your clothing on your schedules–even if it’s worth only $25– you may lead the trustee wonder if you were naked when you filed your case. Your bankruptcy schedules just don’t look right.
Properly preparing bankruptcy schedules is a partnership between the attorney and the client. All too often one or the other misses things that should not be missed, like clothing. I confess that I once went to great detail to list various items of tack (horse equipment and accessories) but didn’t realize we failed to list the horses. We just missed them. And the client, who knew what property she owned better than I did, said nothing. The horses were two old, worthless animals, and all the value was in the tack. Still, it looked bad and was embarrassing to me.
Since then, when I see, for example, car payments, I look to make sure a car is listed. When I see veterinary care, I look to see if the animals are listed, even though they may have no value. I always list jewelry. Everyone has some jewelry, even if it’s just an inexpensive watch. Some things just raise eyebrows if they are not listed.
So the lesson in all this for clients is to pay attention when you review your schedules on your signing date. I schedule two hours for this, and longer for more complicated cases. I call it the appointment to review, modify, review again, edit, review again, edit again, sign, then file appointment. You get the point.
The lesson for lawyers, me included, is to make sure a client’s bankruptcy schedules make sense and are internally consistent. You can always amend, but filing schedules that don’t make sense just invites trouble.
Russell A. DeMott is a Charleston, South Carolina bankruptcy lawyer representing debtors in Chapter 7 and Chapter 13 bankruptcy.
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