Disclosure – The Key to a Successful Bankruptcy Case

Debtors in bankruptcy have a duty of disclosure that includes the requirement to disclose all their assets, debts, and income. Though many debtors might be tempted to omit an asset out of fear that they will lose it in the bankruptcy case, debtors are entitled to exempt property and to shield some property from creditors. In the majority of Chapter 7 cases, all of a debtor’s assets are exempt. At Whitten & Whitten we can help walk you through what you will need to disclose to file for bankruptcy and which pieces of property you will be able to keep.

How do I Complete my Disclosure Requirements?

Generally, a full and complete disclosure of all of a debtor’s financial information is accomplished through the following strategies:

• By completing all the required forms and schedules;
• By providing copies of the necessary documents required by the Bankruptcy Code or requested by the trustee; and
• By attendance at the meeting of creditors.

It is important that debtors understand that the meeting of creditors is conducted under oath. At this meeting, a debtor answers questions about his or her income, assets, and debts. Lying or trying to conceal assets on any forms or during any meetings with the trustee will not only prevent a debtor from discharging his or her debts, but will also put him or her at risk of facing criminal charges. As a debtor, you sign bankruptcy forms and schedules under penalty of perjury and certify that all the information included is true and correct.

Do I Really Need to disclose all my Assets?

Yes, the bankruptcy schedules require a full disclosure of assets. Thinking through the categories of items listed below can help you list everything you are required to list:

• Cash;
• Deposit accounts at banks, savings and loan institutions, credit unions, and certificates of deposit;
• Automobiles;
• Trailers;
• Boats, snowmobiles, motorcycles, ATVs;
• Household items and personal effects, including but not limited to: major appliances, living room items, bedroom items, clothes and jewelry, and miscellaneous items such as books and DVDs;
• Real estate;
• Life insurance policies;
• Retirement accounts such as IRAs, 401k, pensions;
• Stocks, bonds, annuities;
• Business/Partnership interests;
• Machinery;
• Office and/or farming equipment;
• Pets and other animals;
• Patents, copyrights, licenses, franchises;
• Interests in equitable and life estates;
• Potential claims against someone as a result of an accident or personal injury;
• Money owed to you;
• Any inheritance in which the person has already passed away.

Assigning Value to Personal Property

To file a bankruptcy case, not only must you list all of the assets that you have, you must also assign them a reasonable value. Under the Bankruptcy Code section 506 (a)(2), debtors are required to assign the “replacement value” to the item. Replacement value means the price that a retail merchant would charge for an item based on its age and condition. Many clients have questions about where to find a realistic value for their items. For household items like couches, tables, and TVs, sites like Craigslist or eBay can be excellent resources to help you determine the value of an item. For more expensive items, like some jewelry or furs, it is best to have the item appraised and keep the appraisal paperwork handy in the event of any questions about the value. For determining car values, two of the most widely used and accepted resources are the National Automobile Dealers Association (NADA) and Kelley Blue Book.

Contact an Indiana Bankruptcy Attorney

Whitten & Whitten realizes that having to list everything you own and assign it a value can seem overwhelming. Whitten & Whitten are experienced Merrillville bankruptcy attorneys who will help you sort through your assets and answer any questions you have about valuing them for your bankruptcy case. Contact us online today or by calling 219-756-0555 to schedule a free consultation.