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Disclosure of Property in Bankruptcy

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Disclosure of Property in Bankruptcy
When filing a bankruptcy, clients are required to list and disclose their property in the bankruptcy petition when it is filed.  Debtors often wonder what needs to be disclosed and what does not.  If there is a doubt whether it should be included, it is probably a good idea to speak with your attorney about the matter, and they will be able to advise you more specifically where the property should be included in the petition.
The bankruptcy schedules require Debtors to disclose personal property, such as vehicles, furniture, household goods, jewelry, wedding rings, bank accounts and the money in those accounts, cash on hand, retirements funds, annuities, stocks, tools and other equipment, clothing, books and pictures, electronic equipment, interest in insurance policies that are pending, and tax refunds, etc.  Schedule B specifically asks about each of these items, as well as other items, and Debtors have an obligation to disclose the applicable property with a value and description of the property.  If there are things that are not included in the bankruptcy petition and the Trustee finds out, they may assume the Debtor was trying to hide the assets, and the Debtor may be investigated for bankruptcy fraud.  Attorneys usually have no way of knowing what property Debtors have unless they are informed so it is very important for Debtors to inform their attorney of what property they have and how much the property is worth.
It is also important for Debtors to list any real property they may have, including houses, timeshare units, and mobile homes, as well as the value of the property so the Trustee can determine if there is equity in the property.
Listing one's property is essential for many reasons.  There can be situations where the property not be listing can negatively affect Debtors outside the bankruptcy proceedings.  One example is if a Debtor's house is robbed or if there is a fire in the residence.  Insurance companies will often check the bankruptcy schedules if the insured has filed a bankruptcy.  If the property the Debtor has included in the insurance claim is not listed in the bankruptcy paperwork, the insurance company can deny the claim and report the Debtor to the Trustee for not have accurate information in their bankruptcy schedules.  The same situation applies with one's car.  If the car is stolen or is in an accident and needs repairs, the insurance company can deny the claim if the property is not listed appropriately in the bankruptcy petition.  It is therefore essential for Debtors to list their property.  If you have any questions about this, please contact a St. Louis or St. Charles bankruptcy attorney.

Category: Bankruptcy

2 Comments to "Disclosure of Property in Bankruptcy"

You should disclose single items of great value, such as a gun collection, an expensive painting, otherwise it is sufficient to group your clothing and household goods together under "household goods and furnishings" and provide an estimate of the current value. In almost all cases, closing and household goods do not have a value that exceeds our state exemption of $3,000.
Posted by Tobias Licker on May 16, 2012 at 10:43 AM
I wasn't aware that to declare yourself bankrupt you have to disclose such a lot of information. It's fairly obvious that you would have to disclose information on properties and vehicles etc, but I didn't know that you needed to disclose information on personal possessions such as clothes and books etc. Are they disclosed to the amount that you originally paid for them, or is it their value after depreciation?
Posted by Richard Hughes on May 16, 2012 at 04:19 AM

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