Five Reasons to be Honest About Your Assets

November 23rd, 2009 by Reed Allmand

Bankruptcy is a great opportunity for many people to get back on track financially, but you need to be honest with the court and your attorney.

If you are struggling financially, it is likely that bankruptcy can be a wonderful opportunity for you to turn your finances around.  The process is usually easier and smoother than most people expect, but you need to be honest and upfront with the court.  If you are not honest, you could face serious consequences.  Here are five reasons that you need to be honest during your case.

1. To avoid criminal prosecution.  Individuals can be charged with perjury if they hide assets or lie to the court.  Bankruptcy is not a scary process, so do not let this worry you.  Just make sure that you aren’t trying to take advantage of the situation, and everything will be fine.
2. To protect your discharge.  The trustee in your case can ask the court to deny your discharge, because you were not honest.  This can become a terrible situation, because you just went through bankruptcy, but you won’t gain any of the benefits.  None of your debts will be eliminated or restructured, and you could lose nonexempt property without gaining anything in return.
3. Assets can be abandoned.  To someone that doesn’t know bankruptcy, this might initially sound like a bad thing, but it is actually good.  If you are honest and list all of your assets properly in your case, and the trustee doesn’t sell the asset when your case is open, the asset is abandoned.  That means it is still all yours after your case ends.
4. You can also sometimes end up getting assets exempted that a court wouldn’t have normally exempted.  Here’s what happens: You are honest and up front with your attorney, and for one reason or another your attorney sees that the asset could be considered exempt, so he lists it as such.  The creditors and trustee then have 30 days from the 341 meeting to object.  If they don’t, the asset is considered exempt.
5. To make your case go smoothly, and to gain the most from bankruptcy.  Attorneys need to know everything about your situation in order to determine how bankruptcy can benefit you the most.  There are important decisions that they have to make on your case, based on the specifics of your situation.  If you are honest and up front your case will go efficiently, and you will stand to gain a lot from bankruptcy.

If you are considering bankruptcy and some of these sound scary to you, don’t worry.  If you choose a good attorney, and you are honest with them, the process isn’t as bad as you might think.  The benefits that you have to gain outweigh any negatives by wide margin.  If you would like to find out more about how you can have debts wiped out and your financial situation put back in order, contact an attorney.