Completing a Bankruptcy Petition
When filing for bankruptcy a petition must be filed. If the debtor has an attorney the attorney generally fills out the petition based on information provided by the client. The attorney will then meet with the client to have the individual(s) review and sign the petition. While the attorney does fill this out, the debtor(s) are responsible for the information. It is very important that the individual is open and honest with the attorney. It is also very important that the debtor carefully reviews the petition to make sure that all information is accurate and disclosed. If a debtor is unsure of whether an asset should be disclosed it is always better to discuss the matter with an attorney who can give proper legal advice. The debtor will also attend a creditors meeting. The bankruptcy trustee will ask if all information is accurate and all assets and debts have been disclosed. If there is anything missing this is the debtor’s opportunity to disclose the information. If information is disclosed at the creditors meeting the schedules filed with the bankruptcy petition will likely need to be amended to reflect that information.
In the event that a debtor does not disclose all information on the bankruptcy petition a number of things can happen. Failing to disclose information is considered fraud. Bankruptcy proceedings are federal matters, and are subject to investigation by the United States Trustee and the Federal Bureau of Investigation. Fraud, or attempted fraud, is punishable by fines and/or incarceration in a federal prison.
If a debtor fails to disclose creditors that creditor may not be discharged as they did not receive notice and did not have an opportunity to be heard at the creditors meeting. If a debtor realizes that a creditor was omitted the debtor should amend his/her schedules to reflect that information as soon as possible.
If a debtor fails to disclose assets a number of things can happen. Depending on the asset the schedules can be amended. If a debtor fails to disclose an asset the trustee can object to exemptions being applied. If the asset is large, or worth any sum of money, the trustee can hold the case open or require the debtor to convert their case. At this time the debtor may be able to pay the trustee for the property, but if that is not an option, may be required to turn over the property. Once a Chapter 7 case is determined to have assets the debtor may not be able to voluntarily dismiss the bankruptcy proceeding.
If you have questions about this, or would like to schedule a consultation, contact a St. Louis Bankruptcy Attorney Today.