Everyone who files a bankruptcy petition signs their bankruptcy schedules under penalty of perjury. Failure to list assets or accurately disclose your financial condition can lead to a denial of a bankruptcy discharge or allegations of bankruptcy fraud. Here are a few tips to consider when filing bankruptcy:
- List ALL Assets. You must list all assets you own when you file bankruptcy. This includes obvious property like real estate and automobiles but also property like patents, business interests, counterclaims in lawsuits, and the right to receive tax refunds. The simplest way not to receive a discharge is to fail to list all your assets. One also cannot avoid listing of assets by simply transferring an asset to a friend or family member. Any transfers of property within two years of the filing date of the bankruptcy must be disclosed. The transfer of assets for no consideration is a clear fraudulent transfer.
- Accurately Value Your Assets. Many people who file bankruptcy experience some uncertainty about how to value their assets. It is important not to undervalue or overvalue assets. For valuing real property, note if there have been any appraisals recently or comparable sales in your neighborhood. For personal property, the correct value to use is “replacement value” which is not retail value or yard-sale value. To accurately assess “replacement value” you must consider the age and condition of the property. If you have antiques or jewelry and are unsure of value, you may want to obtain an appraisal. For automobiles, use the NADA or Kelley Blue Book value. Always list the basis of your valuation and be prepared to explain valuation to your bankruptcy trustee, especially if you have submitted recent financial statements to lenders that used different valuations for your property.