What to Avoid When Filing for Bankruptcy

Interviewer: Actually, that’s perfect to bring up. What are the most common mistakes people are making before they file for bankruptcy?

You Must Not Omit Any Assets When Filing out Your Bankruptcy Petition

Jeanne: They don’t list all their assets. This could happen if they either leave out a creditor or they leave out property because they are dealing with incomplete information. Sometimes, they omit a listing because they mistakenly feel it isn’t important. However, what occurs is now there’s a problem and I have encountered this more than a few times with clients.

You Can Face Repercussions from the Judge If You Fail to List All Your Assets

One time, it was a divorced man who failed to tell me about some property that he owned and it was something that I have suspicions about and I queried him quite strenuously on several aspects of it and he denied ownership. And we went to the trustees meeting and his ex-wife was there and she had listed some properties that he purposely left it off and he got into some trouble over that because he lied.

He knew what he was doing because he was actively trying to hide it but the thing of it is that other individuals face the same kind of trouble for not actively hiding something. They mistakenly think that a particular asset is insignificant but they are subject to the same consequences for innocently leaving assets of their listing.

An Attorney Can Best Advise You on What Property Should Be Including in Your Listing

Another reason I recommend retaining an attorney to handle bankruptcy is that we can tell them, “Yes, that’s insignificant,” or, “No, no we do not need to list that.” You’re supposed to list all your property and that means all your property and nobody cares about the numbers of socks in your sock drawer.

Many People Do Not Know What Actually Is Considered Property

It’s not that cumbersome but sometimes people don’t understand what property legally is. Property is not just tangible. It’s not just things you can touch and hear and feel. Sometimes it’s a right and so if you took one of those drugs, that later is found to kill people you have a right to sue the pharmaceutical company. That’s a property right. You have to list that and if you don’t, you may lose that right because you swore under oath that this is your entire property list.

If you seek the advice of an attorney and you don’t click with them, before you do something like go with petition preparer, look in the phonebook or look in the internet and try an attorney one more time. There are plenty of really good bankruptcy attorneys who represent their clients well who aren’t out to take advantage of you and who know the law. You want somebody who’s going to take care of you and a petition preparer is not going to do that.