Despite his best efforts, Jason made a few mistakes in his bankruptcy filing. Specifically, he forgot to include several creditors, and missed several assets. Jason panicked, wondering if he would get in trouble or if his bankruptcy would be discharged. The first thing he needs to do is discuss the problem with his North Carolina bankruptcy attorney. Jason may find that there are some simple solutions to his problem.
Why do we have to list all debts in a bankruptcy filing?
It’s essential to include all of your creditors when filing for bankruptcy. In fact, the law requires it. Several issues could be affected by failing to list debts, including:
Eligibility. To file a Chapter 13, you cannot have more than a certain amount of debt:
- unsecured debts must total less than $419,275
- secured debts must be less than $1,257,850
If you add omitted debts to the ones listed in your schedules of assets and liabilities, you might become ineligible to file a Chapter 13.
Outcome. Debts that are not included in your bankruptcy filing generally cannot be discharged.
A clear and complete picture of your assets is also important.
Why do we have to list all assets in a bankruptcy filing?
The trustee and court need to assess your financial condition, which is difficult or impossible unless you disclose everything. Your creditors need to know whether your debts to them can be repaid, at least in part.
Failing to list assets in a Chapter 7 could spell trouble because:
- The trustee may have to reopen your case to sell the assets that you failed to disclose.
- The court could revoke your discharge if you have already received it.
In a Chapter 13, it’s still important to list all of your assets in your bankruptcy filing even though the trustee will not be selling them. Even exempt assets should be included.
Are there any penalties for failing to list a debt or asset in my bankruptcy filing?
Sometimes failing to file complete documents is considered bankruptcy fraud. People convicted of bankruptcy fraud could face up to five years in a federal prison and be fined up to $250,000.
How can I fix an inaccurate bankruptcy filing?
First, talk to your attorney immediately. We cannot stress this enough.
Some debts and assets are easy to overlook. The courts often will not penalize someone for a simple mistake. But you have to fix your mistakes as soon as possible, or you could look like you are deliberately trying to hide information from that court. And that’s never good.
Learn More About the Connection Between Bankruptcy Filing, Debts, and Assets.
Attorney Leslie Craft has the experience you need to deal with bankruptcy. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives. Consultations are free and only take about 30 – 45 minutes of your time. Your options may surprise and even excite you!
To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at email@example.com. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.
Bankruptcy Doesn’t Have to Be a Painful Process.