Never Do This On The Day You File Bankruptcy

Posted by Wesley Scott on May 10, 2020 at 4:54 PM
Wesley Scott

Bankruptcy Lawyer There are things you should never do on the day you file bankruptcy. The date you file bankruptcy is a snapshot of your life that is disclosed to your creditors along with the bankruptcy trustee. From that date, we glean what are your assets and what are your debts. We also see from that date backwards what kind of payments you made to creditors and what kind of transactions you made.

 For example, you will be asked what kind of transfers you made in the previous two years prior to filing the bankruptcy. In other words, did you sell vehicles or homes, sell furniture or any other asset. We will need to know who you sold it to, how much you sold the items for and was that sale price the fair market value of the items sold. The reason we disclose all of this is when you file a bankruptcy case, your financial life is an open book subject to some examination by the bankruptcy trustee and creditors.

There are instances when the trustee can undo certain transfers and sell non-exempt assets. If you are in a Chapter 13 Bankruptcy, trustees will need to determine what we lawyers call the “best interests test”. Without complete and accurate information, trustees cannot do their jobs.

So the one thing you should never do on the date you file bankruptcy is not disclose all your assets and debts, transfers made within two years and payments made to creditors. Refusing or failing to disclose all your assets and various transfers could possible lead to your discharge being revoked and even worse. There are people who do get prosecuted for bankruptcy fraud as well.

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A word from Minnesota Bankruptcy Attorney, Wesley Scott