Tell the Whole Truth
When You File For
Bankruptcy
Don't try to hide
property. It will come
back to haunt you.
You must sign your
bankruptcy papers under
penalty of perjury,
swearing that everything
in them is true. One of
the things you're
swearing to is that your
forms are complete,
because the forms ask
you to list "all"
property, income, and
debts. Filing incomplete
or inaccurate bankruptcy
forms can lead to your
case being dismissed --
or worse, if the court
thinks you omitted
information or made
false statements
intentionally.
The law is not supposed
to punish those who make
one or two honest
mistakes. If you
accidentally leave
something off your
papers or misstate
something on your forms,
you can usually correct
your papers or explain
the mistake to the
trustee. But if you
leave out so much that
it appears that you were
careless, the court can
find that your actions
demonstrate an
indifference to the
truth and can dismiss
your case on that basis.
If you deliberately
attempt to hide assets
or use a false Social
Security number, it will
probably come back to
haunt you more
profoundly than your
current debt crisis.
List Every Creditor
Bankruptcy can't
help you if you hide
information. If you
fail to list
creditors, the debts
you owe them may not
be wiped out by your
bankruptcy
discharge. So, be
sure to list every
person who claims
that you owe them
money -- even if you
don't think you owe
them a cent. In this
situation, you can
indicate that the
debt is "disputed."
If the debt is
already the subject
of a pending
lawsuit, the debt
can be listed as
"contingent" -- that
is, it depends on
how the lawsuit
comes out.
When your bankruptcy is
finished, you will no
longer owe any debts
that have been
discharged. If a
disputed debt is
discharged, the entire
dispute will be
irrelevant. The creditor
will be legally barred
from collecting anything
more from you regardless
of who is right.
Don't Omit Creditors
Just Because You
Like Them
Some filers consider
omitting creditors
whom they like --
such as a relative
or a friendly local
business person --
to avoid having that
debt wiped out. This
is a bad idea, no
matter how honorable
your intentions.
Bankruptcy doesn't
allow you to play
favorites. In fact,
a central purpose of
bankruptcy is to
make sure that all
of your creditors
get their fair share
of what you have,
and that certain
obligations (like
child support) are
not shortchanged. If
the bankruptcy
trustee learns that
you've omitted
creditors from your
list, you'll have to
add them, and it
will raise suspicion
about other
statements on your
forms.
