Understanding the Ins and Outs of Asset Disclosure – from Our Memphis Bankruptcy Lawyers
One of the key questions our Memphis bankruptcy lawyers get is “Do I Have to List All My Assets in Bankruptcy?” Filing for bankruptcy can be a complex and overwhelming process, and this is one of the most important aspects.
Many people who think about filing bankruptcy worry about listing their assets. They fear losing their property or having to deal with complications. You may feel this way, too. But it’s actually a critical part of the bankruptcy process, and here’s why.
Why Disclose Your Assets?
Bankruptcy is a legal process designed to help people burdened by overwhelming debt to get a fresh financial start.
For the process to work effectively, the courts expect a full and honest disclosure of assets. It’s the best way to provide the bankruptcy court and your creditors with a comprehensive understanding of your financial situation.
Without disclosing all your assets, there’s no way for the courts to know how to help you. They might not clear certain debts because they don’t know about them. Or they could worry you’re defrauding the system by hiding wealth.
Types of Assets to Disclose
There are a few different types of assets that might come up during your bankruptcy proceedings.
This includes any real estate, including your primary residence, vacation homes, rental properties like timeshares, and any land you may own.
This category includes all valuable personal belongings, like vehicles, jewelry, electronics, furniture, and collectibles. You don’t have to report everything you own – just the items of such high value that the courts would want to know about them.
This category includes your bank accounts, retirement accounts, stocks, bonds, and other investments. Some people come into bankruptcy having no savings at all. Others worry the process might wipe their retirement accounts. But in reality, bankruptcy provides a way to protect your IRA and save your financial future.
If you own a business, you’ll need to list it along with any associated assets.
This category might include intellectual property like patents, copyrights, and trademarks.
Consequences of Not Disclosing Your Assets
While listing your assets can help you in the long run, failing to fully disclose your assets can have serious consequences. The court relies on the accuracy of the information provided to make fair decisions and ensure your creditors get paid fairly.
Because it’s the only way for courts to understand your entire financial situation, they take this very seriously. Hiding assets or refusing to tell the court about it can lead to major consequences, including:
- the dismissal of your bankruptcy case
- potential fines, or even
- criminal charges for bankruptcy fraud.
Fortunately, our bankruptcy lawyers can help you figure out what you need to share and make sure it’s listed correctly.
Bear in mind that just because you list an asset doesn’t mean you’re agreeing to get rid of it. In many cases, bankruptcy can help you keep your assets. Our attorneys can help you by talking through these concerns as early as possible.
Exemptions and Protecting Your Assets
While you must disclose all your assets, you won’t necessarily lose them all as a result. Exemptions exist to protect certain types and amounts of property from being sold to repay creditors.
These exemptions vary by state, so it’s crucial you consult with a bankruptcy attorney to determine which assets you can protect.
As one example, bankruptcy can be a critical tool to stop foreclosure or repossession. Just because you list your home or car doesn’t mean you’ll lose it – with the help of your attorney, you can actually use bankruptcy to keep those assets safe.
Working with a Bankruptcy Attorney
Bankruptcy can be challenging and complex, and the stakes are high. You don’t want to make a mistake by not listing a certain asset, and you don’t want to lose important assets in the process.
This is why you should always work with a qualified bankruptcy lawyer on your case.
Our award-winning Memphis bankruptcy attorneys can help. We offer a free consultation where we’ll discuss any questions about your assets, including what to expect when you file.
In addition, if any issues come up with your assets down the line, we can step in on your behalf to support your interests and work things out with the court. Unlike many other local firms, we don’t charge extra for this additional work. We’re here to help you every step of the way.