Filing for bankruptcy is a very serious undertaking. The laws are complex and the penalties for knowingly misrepresenting required information are very severe and unforgiving. Fines of up to $250,000 and prison sentences of up to 5 years are possible.
Your bankruptcy attorney will advise you of your responsibility and guide you in providing answers to the detailed personal and financial data that must be disclosed in your bankruptcy petition. Your attorney will ask you to fill out a long questionnaire and to make copies of numerous personal documents. Without your complete cooperation in collecting this data, he (she) cannot complete the petition in a manner satisfactory to the Bankruptcy Trustee and the Court.
The following tips from the files of the FBI, will help you understand your legal responsibility in providing information to your bankruptcy attorney.
1. All creditors must be listed, even the ones you intend to pay after the case is filed.
2. Many assets are protected from being seized by the bankruptcy court, but only if they are listed. It is a crime not to list all property.
3. Part, or all, of any tax refund due for the tax year a bankruptcy case is filed may be required to be turned over to a bankruptcy trustee. Any refunds that are due for previous years may be required to be turned over.
4. You must list all business information if you are self-employed. If you are in business you must list all personal and business debts, assets and income.
5. All income must be reported, including Social Security benefits, family support, alimony, unemployment, and pensions.
6. Intentionally incurring debts with the intent not to pay may be a crime.
7. You should maintain payments on all secured property that you wish to keep that could be repossessed before the case is filed. This includes house payments, car payments, furniture payments, equipment, and other items used as collateral.
8. The court may disallow a bankruptcy if you misrepresent any facts or otherwise lie on the papers filed in court for the bankruptcy.
9. Bankruptcy stops all bill collectors. Creditors, including tax collectors, are barred from attempting to collect any debt from you the instant the petition is filed. This protection is permanent for all discharged debts. Bankruptcy does not stop any criminal proceeding or government regulatory proceeding.
10. Bankruptcy does not clear up a credit report. It may be reported on credit reports for 10 years.
11. You cannot dismiss a Chapter 7 case without court approval. You can voluntarily dismiss a Chapter 13 case anytime.
12. A secured creditor may add the attorney fees they incurred to the balance owed on the property. This may happen even if you are not behind on payments at the time the bankruptcy is filed. Most mortgages and other loan documents provide that reasonable attorney fees are allowed and will be added to the balance due on a loan.
13. Bankruptcy crimes carry a punishment by, among other things, imprisonment up to five years. It is a bankruptcy crime to: conceal property from the court or bankruptcy trustee; knowingly and fraudulently make a false oath or account; knowingly transfer or conceal property to defraud creditors; conceal, destroy, mutilate, or falsify records or documents; and file a bankruptcy petition to deceive or defraud.
(13 Tips From The FBI written by Rachel Lynn Foley, Kansas City Missouri Bankruptcy Attorney)
At The Beach Paralegal Services does not provide legal advice. We work only under the supervision of licensed attorneys. This blog is only for informational purposes and does not construe legal advice. Please consult your attorney directly for all legal advice in this or any other bankruptcy matter.
At The Beach Paralegal Services provides bankruptcy attorneys expert and cost effective petition preparation and court filing assistance. Visit us on the web to learn how we save our attorneys time and money.
