In the recent era the financial downturn has led many individuals to file bankruptcy in order to get rid of their debts. Undoubtedly it has also turned out as an effective debt relief fix for your uncountable debts. However, there are some tagged features which you need to consider while filing bankruptcy. The foremost among them is to have an honest approach towards your endeavors.
If you are not honest about your debt listings, you have to face severe consequences later. Bankruptcy filing in order to be effective requires an honest declaration of all your assets. Normally while filing bankruptcy, you swear under “penalty of perjury” that everything given in the papers is true to the best of your knowledge. If you deliberately omit the disclosure of complete information of your owned items it is regarded as a fraud case. Your assets may include everything ranging from real estate, personal property to bank accounts, investments or retirement plans.
If you conceal the disclosure of any of these assets to satisfy certain personal interest, the idea would not be much fruitful. In fact there can be added consequences of property concealment that you should be aware of before considering anything.
The basic consequences of hiding your assets include:
Normally filing bankruptcy offers you relief from certain debts depending upon your state. This is called discharge of debts. A court order is issued which stops the creditors from collecting a debt as a personal liability from a debtor. You may not be able to get all your debts discharged, but by including bankruptcy, you can get discharge facility on your debts. In case you hide your debts you lose your rights to claim discharge on certain debts.
If you do not disclose all the details of your property you may lose out on your rights to claim any exemptions.
When you file for Chapter 7 or Chapter 13 bankruptcy, you need to be accurate while filing the petition, schedules and the statement of financial affairs. If you are caught attempting to conceal any important information, it is likely to result in a criminal prosecution case.
If you do not disclose your assets properly you may even lose out on some of them. In most of the cases the individuals fear that disclosing all of their assets might result in liquidation to pay creditors.
It is this fear that leads to unnecessary fraud cases. But the intentional omission of such significant details might lead to significant penalty issues.It is therefore advisable that while filing bankruptcy you should ensure that you are not omitting any important information. If you think your documents are not filed accurately then update them immediately with the help of a bankruptcy attorney.
You can get in touch with the trustee and provide any documents or facts that you had earlier skipped. You need to update your entire information before the first meeting of creditors as in the meeting the creditors question the debtor regarding their assets, liabilities and financial history. In case you fail to produce the updated listing you have to obtain a separately scheduled examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure.
If you are accurate from the very beginning you can avoid falling prey to any of this consequences. Being dishonest will strangle you with more problems and added financial stress in the form of penalties. If you are clear about your possessions your bankruptcy procedure will be smooth and free from any fraudulent activities. This will help you to build your finances afresh without suffering major consequences.