One of the biggest mistakes that you can make when filing for bankruptcy is failing to discharge your bankruptcy debts. If you are found guilty of this crime, it will be essential that you contact a bankruptcy attorney who can make sure that you have listed all of your assets.
If you fail to disclose your assets, you may not be able to discharge your bankruptcy debts. If you are not able to discharge your debt, you will still be responsible for all of it. Your property will still be turned over and used to pay off debt. However, you will be responsible for all of the debt you own. This can be a worst case scenario because you will still own debt and will also not have any assets. Also, if you have already been given a discharge, this discharge can be revoked.
Your bankruptcy schedules that list your assets are signed under penalty of perjury. You are agreeing that your listing is accurate. If it later turns out that the list is not accurate, you may be imprisoned for up to five years, be forced to pay a fine of $500,000 or both.
Ways You Can Fail To List An Asset
There are three ways in which you may be found guilty of hiding an asset. You may have transferred an asset to a friend or family member. This is likely one of the most innocent mistakes, since you may want to gift something sentimental to a family member. But this is not allowed. You may simply fail to list an asset. Regardless of whether this is a mistake or not, it can leave you guilty. Finally, if you place a fraudulent lien on a property to make it seem as if it is worth nothing, this is a crime. Fortunately, if you immediately file papers to correct the mistake, the courts will allow you to continue with the bankruptcy because you will be showing that there was no intend to defraud, hinder or delay.
How To Protect Your Assets
If you would like to keep your assets and if you are earning an income, one option is to file for Chapter 13 bankruptcy. Under this form of bankruptcy, you are able to renegotiate your debt and you will be given a reasonable repayment plan. If you file for Chapter 7 bankruptcy, instead, you are forced to give up your assets.