When you file bankruptcy whether you file a Chapter 7 or a Chapter 13 you must file a Statement of Financial Affairs. Brett Weiss has written several articles on the Statement of Financial Affairs. Question 10 asks you questions about transfers in the last year prior to filing. The trustee will use this information to discover what you have done with assets before filing bankruptcy. The question is designed to ferret out information about fraud. Did you transfer an asset that could have been sold to pay your creditors?
In a 341 meeting recently the trustee asked the debtor if she knew the person that she transferred a vehicle to. She replied three separate times that she did not. The trustee then asked; “Why did you claim the same person on your 2008 tax return if you did not know them?” The debtor commented that the person was her partner’s nephew but he was not a relative of hers. The trustee said then the answer should have reflected that inside of saying that he was a stranger.
The trustee was a little irritated that the debtor did not list accurate information. I don’t think the debtor was intentionally lying. I believe the debtor did not want people involved in her personal life. However, when you file bankruptcy it is public record and you are asking for the Bankruptcy Court to wipe out your debt. In order to receive this benefit you must answer the questions truthfully or face a perjury charge.
Be accurate and truthful when you fill out the information for your attorney. We, as attorneys, cannot advise you or protect you if you are not honest with us. Bankruptcy is not a game of hide and seek. If you are not sure about listing something, ask.! Not asking could land you in Leavenworth or some other federal prison.
Remember that knowledge is power and the more knowledge you have, the more power you will have to stay out of prison.
Written by Kansas City, Missouri Bankruptcy Attorney, Rachel Lynn Foley.
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Last modified: May 7, 2014