Like real estate, there are three simple rules to bankruptcy: Disclose. Disclose. Disclose.
Disclose everything: your income, your assets, your debts. It’s a simple rule, and if you follow it your bankruptcy will go off without a hitch.
Ignore the rule, and you could have problems. When my clients come in for their initial consultation, I talk to them about their property, and how it’s divided into two categories: exempt and non-exempt. Some get concerned, and will ask me what happens if they don’t disclose all their property. Bad things, I tell them.
If you try to hide any of your property from the bankruptcy court or trustee, you could face criminal charges and get jail time or fines. Even worse for some people, you could have your bankruptcy dismissed or revoked. If that happens, you’ll be left without the protection of bankruptcy and will be in the same exact place as before you filed. Creditors will be breathing down your neck in no time.
The thing is, state and federal exemption laws protect most of my clients’ property. They don’t need to even think about not disclosing anything. And if you happen to have a jet ski or Joe Dimaggio’s rookie year baseball card, isn’t that a small sacrifice in comparison to the tens of thousands of dollars in debt you’re likely to be getting rid of?
