When you invoke the power of the bankruptcy court, seeking protection from your creditors, you also have duties as well. Section 521 of the Bankruptcy Code outlines many of these duties. Chapter 13 debtors must file a host of schedules with the bankruptcy court and these schedules are verified under penalty of perjury. As such, these schedules must be complete and accurate. Filing inaccurate or incomplete schedules with the bankruptcy court may result in debtor being denied confirmation of the Chapter 13 plan, and worse, a denial of discharge or being charged with bankruptcy fraud.
The code also requires debtor provide Chapter 13 trustee with tax returns, paystubs, and bank statements, often in advance of the 341 meeting required under the Bankruptcy Code. In general, all debtors have a duty to cooperate with the trustee’s administration of the bankruptcy estate or they risk denial of confirmation of their plan or a denial of discharge.
In other words, you cannot simply file a Chapter 13 Bankruptcy to protect yourself from your creditors but not cooperate with the trustee in the administration of the estate. In the Chapter 13 Bankruptcy world, we call this filing Chapter 13 Bankruptcy in bad faith. Chapter 13 Bankruptcies must be filed in “good faith” or your Chapter 13 Bankruptcy plan may not get confirmed and trustee may seek dismissal of your Chapter 13 Bankruptcy case.
Your licensed and local bankruptcy attorney should be your rock and your guide in making sure you are complying with the duties of a debtor under Section 521 of the Bankruptcy Code and all other bankruptcy provisions. Never speak to paralegals about bankruptcy as they cannot give you legal advice- so what’s the point?