Tell the truth – the whole truth – and nothing but the truth

27 Oct Tell the truth – the whole truth – and nothing but the truth

The point of filing a bankruptcy case is to get a discharge of your debts.  The deal is simple.  An honest debtor gets a fresh start.  The price of the bargain?  You have to let the trustee have all of your “non-exempt” assets. That means you have to tell the trustee about everything you have.

If you forget to tell the trustee about everything you have, it’s a very bad thing for many reasons:

  • You could lose your discharge
  • The trustee can sell or dispose of the asset anyway
  • You might be committing a bankruptcy crime
  • If you are committing a bankruptcy fine, you could go to jail.

Here are some things you might think are not assets but must be disclosed:

  • Your jewelry
  • Money you have in your house but not in the bank – even if it is literally in your mattress
  • Things you own that are in other people’s name
  • Things you didn’t buy but were given to you as gifts
  • Things you in inherited from others and are “just heirlooms”
  • Things or land you have in other states or even other countries.
  • Rights to get paid for something in the future, even if you are not sure how much – maybe a lawsuit, maybe some rights under a trust agreement or estate.

Bankruptcy is no place to be be too smart for your own good.

Remember, in bankruptcy, the truth will set you free.  Tell your lawyer.  Maybe you can protect your assets with exemptions.  But don’t hide the truth.

Lakelaw represents people 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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