Sacramento bankruptcy & injury law blog

Bankruptcy Obligations

 Bankruptcy obligations are many. But so are the benefits. Some of the most basic requirements are to disclose all your debts. The same goes for all your assets. Listing your debts is obvious. The purpose of filing for bankruptcy is debt relief. Listing your debts in your bankruptcy paperwork is a given. It is how your creditors are notified of your bankruptcy filing.

But just as important is listing your assets. Bankruptcy obligations require you disclose all your assets. This includes all of your property. And I mean all of it! If you don't list all your stuff, you might not be able to keep it. Even worse, you may not be entitled to bankruptcy benefits. Intentionally concealing your property may land you in legal trouble. Big legal trouble. This news story depicts the story of a doctor who hid her assets from bankruptcy. Bad idea. Don't do it is the lesson.

Bankruptcy law allows you to retain your possessions. Normally for consumers filing bankruptcy, this includes all their property. But bankruptcy obligations require you disclose all your assets, even if you have more property than you are allowed to keep. "Lending" property to a relative or "forgetting" a car accident claim are bad ideas before filing for bankruptcy. Be honest. You have to be. Filing bankruptcy is done under penalty of perjury. You are swearing to tell the truth just by signing your bankruptcy paperwork.

As I have told clients over the years, take care of the bankruptcy and the bankruptcy will take care of you. Amongst the most important bankruptcy obligations is to be truthful. Bankruptcy is a powerful legal tool. It can afford filers many benefits. Your debt can be eliminated or diminished with only your signature. Make sure, though, you are signing off on the truth.

Sacramento Bankruptcy Bust

Sacramento Bankruptcy Bust

A recent Sacramento bankruptcy bust shed light on one of the basics of bankruptcy.  Tell the truth!  Filing bankruptcy is a powerful tool.  It allows you to eliminate debt you are unable to afford.  After filing for bankruptcy creditors can no longer come after you.  Lawsuits, collection letters, wage garnishments and even creditor phone calls must come to an end when a bankruptcy is filed.  Sounds good, right?  Well for those in need, it is.

But with the relief bankruptcy affords comes responsibility.  You are obligated, under penalty of perjury, to be honest in your paperwork when you file for bankruptcy.  This includes disclosing all your debts.  It also includes revealing your assets.  All of them.  A Sacramento resident who filed for bankruptcy didn't do this.  This Sacramento bankruptcy bust was revealed in a recent Sacramento Bee story.  He didn't list all his debts.  And perhaps more damming, he didn't list all his assets.

Before this man filed for bankruptcy, he acquired lots of debt.  Hundreds of thousands in credit card debt.  With his borrowed money he bought real estate.  This wouldn't be a problem if he payed the debt back.image.png  Or even if he intended to repay the debt.  But he planned neither.  When he filed for

bankruptcy he didn't disclose his new debt or assets.  That is a crime.  A federal criminal, punishable by years in prison.  That's exactly what happened in this Sacramento bankruptcy bust.

Is this a cautionary tale?  Maybe for some.  But doubtful for most.  The message, though, is to be honest in filing for bankruptcy.  Nobody wants to be the next Sacramento bankruptcy bust.  Simply tell the truth and avoid that fate.  Contact my office for a free consultation if you are in need of debt relief and considering filing for bankruptcy here in Sacramento.  Make sure you don't become the next Sacramento Bankruptcy bust!

Dance Mom's Bankruptcy

Abbey Lee, the reality TV star of "Dance Moms," filed for bankruptcy several years ago. And the Dance Moms bankruptcy did not go well. Why? She didn't disclose all her assets when she filed for bankruptcy. That's bad!

Filing bankruptcy provides protection from creditors. It allows you to eliminate debt you cannot afford. And that's good. But you must follow the rules to receive the bankruptcy benefits. One of the most important rules is to disclose your assets when you file for bankruptcy. Dance Moms bankruptcy did not do this. She tried to hide nearly a million dollars in assets from the bankruptcy court, and then lied about it. Again, this is bad.

Dance Moms bankruptcy is a cautionary tale. Her plight is now in the hands of the bankruptcy court. And she is going to jail. See for yourself. She's not the first. Nor will she be the last to suffer such fate.

Fair-Catch?

As a former football player, I've often likened bankruptcy to the fair-catch. It's simple. Wave your hand in the air when you catch a kick and you can't be tackled. In exchange, you can't run. Filing bankruptcy is waving your hand in the air. Your creditors can't tackle you. But you cannot run from your legal obligations. Disclosing your debts is one obligation. So is disclosing your assets. Dance Moms bankruptcy did not do this. She may have disclosed her debts, but not her assets. She lied about it, too.

I have seen Dance Moms. My daughter was a fan. Not bad for reality television. When I saw a news teaser of her bankruptcy problems, I stayed tuned. She spoke of learning from the process. Learning from her mistakes. And, at 51, of growing up. Guess so. Prison sentences of a year and a day will do that. At the end of her ABC News interview, though, she cautioned against filing for bankruptcy. But the bankruptcy did not fail her. She did. Guess she tried to run! 

Bankruptcy Basic: Don’t Lie

Bankruptcy Basic: Don’t Lie

One of the most basic tenets of bankruptcy: don’t lie! It’s not a complicated concept but it is is not always followed. Bankruptcy affords filers a broad range of benefits. Chief among them is the ability to eliminate your debt. Since this is debt that cannot be afforded, bankruptcy can be a big help.

But to reap the bankruptcy benefits, there are obligations. Telling the truth is one of those requirements. When you file bankruptcy you must be truthful in disclosing all your personal and financial information. Your income, expenses and assets are all required in preparing your bankruptcy petition and paperwork.

dont lieYour income, including your income history, is required as part of the bankruptcy process. Eligibility for certain bankruptcy filings, including both Chapter 7 & 13 filings, depend on the amount of income you earn. To file for Chapter 7 bankruptcy, your income must be lower than your expenses. For a Chapter 13 bankruptcy your must earn more than you spend. Whatever bankruptcy option you need, you must disclose accurate financial facts.

Same bankruptcy basic goes for disclosing your personal assets. When you file bankruptcy you can protect, or exempt, your property. In most consumer cases all property is protected. But you can’t lie. You must reveal all your property in your bankruptcy paperwork. Leaving out a home or car is a bad idea!

In addition to your personal information, another bankruptcy basic is to not lie about your debt. You must list it all in your bankruptcy petition and paperwork. You cannot pick and choose what debts to include in your bankruptcy. You must disclose all debts when you file bankruptcy. Eligibility and affordability of your bankruptcy is dependent on your accurate disclosure of your debts.

Even the debt you have and ability to discharge it through bankruptcy is reliant on truth. If you lied to obtain debt, you may not be able to eliminate it through a bankruptcy. The US Supreme Court recently ruled on this subject broadening the definition of fraud beyond just lying. This Wall Street Journal article reflects that ruling.

No matter the situation, when it comes to bankruptcy basics: don’t lie!