Filing bankruptcy can provide financial relief for struggling individuals and can give those overwhelmed by debt a fresh financial start.
Before you decide to file bankruptcy, make sure you understand the importance of being 100% honest when filing bankruptcy. If the bankruptcy court suspects fraud in your filing, your bankruptcy case could be thrown out by the court and you could face serious criminal penalties.
Many people working on their own are overwhelmed by the bankruptcy process. You can connect with a local attorney today to learn more about when is required of you. Simply fill out the case review form below to arrange a free, no-obligation consultation.
If your bankruptcy petition contains a couple honest mistakes or oversights, you may be given a chance to correct them and explain to your bankruptcy trustee what happened. But this doesn't mean you can fill out your forms carelessly - check everything over before filing a bankruptcy petition.
Extensive mistakes and/or omissions in your forms can read as carelessness and might lead the court to dismiss your court case on the grounds that you've shown "indifference to the truth." If the court thinks the "mistakes" are intentional, you could be charged with bankruptcy fraud, which is a serious crime.
If you're unsure how to label any of your debts when filing bankruptcy, you can ask your local bankruptcy lawyer for specifics.
A bankruptcy lawyer might tell you that part of reporting your debts "completely" when you file bankruptcy means reporting those debts you don't think you owe (but a creditor does), but you may be able to list those debts as "disputed." Your lawyer can advise you on how your debts should be labeled.
This may seem like a drag, but consider this: you can't receive a discharge for debts you don't list when you file bankruptcy. Plus, if you're discharged from a disputed debt, you don't have to worry about fighting your creditor any longer - the bankruptcy discharge protects you from collection action.
Some bankruptcy filers find themselves tempted to omit creditors they like - like friends or business owners they know - so that they can pay those people back in full. While this may sound tempting, leaving out any creditor is considered bankruptcy fraud.
As your bankruptcy lawyer can tell you, bankruptcy works by distributing your assets fairly among your creditors; that is, the biggest share of your money will go to whomever you owe the most (not your dear old auntie who helped you with rent).
Plus, if the bankruptcy court discovers that you didn't include all your creditors, it could become suspicious about the truthfulness of the rest of your petition.
If you're set to receive money or property in the coming months (because of a lawsuit settlement, an inheritance, a pension, a retirement fund, etc.), you need to mention it when you file bankruptcy. Your bankruptcy lawyer can help you figure out how to list such assets on your forms when filing bankruptcy.
While some such assets may be exempt, the bankruptcy court needs to be aware of any and all wealth you expect to receive to get a more complete understanding of where you stand financially.
If you intentionally use a false Social Security Number on your bankruptcy forms or misstate/omit information when you file bankruptcy, the penalties you'll face will probably be much worse than the debt you're currently dealing with. Penalties could include:
If you're filing bankruptcy honestly to relieve yourself of unmanageable debt, you shouldn't have to worry about these penalties. But you may want to work with a bankruptcy attorney to make sure your forms meet the standards of accuracy and completion demanded by U.S. Bankruptcy courts.