List all of your assets in your bankruptcy case – it’s a crime not to

29 May List all of your assets in your bankruptcy case – it’s a crime not to

I’m not filing bankruptcy on my motorcycles.  Some debtors believe that if they file a bankruptcy case, they get to keep all their property.  That’s not true.  A debtor in chapter 7 gets to keep his or her exempt property.  However non-exempt property could be sold by the trustee to pay creditors’ claims.

A debtor I know just filed a bankruptcy case without listing two Harley Davidson motorcycles.  He thought that they were more important to him than to the trustee.  So he left them off his petition.  He didn’t tell his attorney.  Big mistake.  The trustee did his homework.  He checked the motor vehicle records.  He found out that the motorcycles were registered to the debtor.  The debtor was really upset.  The debtor’s attorney was really surprised when the trustees asked for the keys to the motorcycles.

Even worse, the debtor and his attorney were really surprised when the trustee filed a complaint to bar the debtor’s discharge.  And even worse, the debtor and the debtor’s attorney were really surprised when the discharge was barred.  And much much worse, the debtor was very surprised when the trustee made a criminal referral of this case to the United States Trustee.

When you file a bankruptcy case, you are swearing under penalty of perjury that everything you say is true.  Leaving off two Harley hogs worth close to $20,000 is no accident.  It’s bankruptcy fraud.  You can lose your motorcycles and your bankrputcy discharge. And you could go to jail up to five years.

If you have assets important to you, tell your lawyer.  You can often protect assets in bankruptcy through exemptions.  If not, maybe chapter 13 is right for you.  Much better than bankruptcy fraud and jail for sure.

Lakelaw represents people and businesses in bankruptcy in Illinois and Wisconsin

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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