Bankruptcy A-Z: O is OOPS
January 7th, 2012 | 
Author: Bankruptcy A-Z: O is OOPS.
When you sign your bankruptcy petition and schedules, you swear under penalty of perjury that you included all of your property, all of your debts, all of your income, and all of your expenses. You swear that everything is correct.
The worst thing an attorney can hear from his client when he is being questioned by the trustee is “I didn’t tell you about that?”
O is for OOPS.
At a meeting of creditors one day, the debtor (thankfully not my client) drove up on Harley. At the time, the hearing room faced the street where the debtor parked his bike. The trustee noticed the debtor drive in and asked about the Harley. The debtor forgot to list it and he lost it to the trustee. He is lucky he didn’t lose his discharge.
Some mistakes are innocent enough and can be corrected, like failing to list clothing that is worth very little. Of course, the trustee cannot sell clothing like he can sell Harleys and other big property.
Failing to list property means failure to exempt the property. Usually listing the property means that it can be exempted. Why risk losing the property?
Failing to list property can lead to criminal charges for concealing assets or fraud. At the very least, if it is worth anything, you can exempt to lose it.
You think no one will ever find out?
Think again.
I sat in on one case where a debtor failed to list accounts and also failed to disclose that she recently took money out of accounts and put it into an account in a relative’s name. Her ex-husband revealed the missing assets to the trustee and the court. The debtor ended up in court before the judge and eventually settled.
Had she disclosed these assets, her attorney could have helped her plan how to protect her assets BEFORE she filed. Once you file for bankruptcy protection, the assets that you are entitled to become part of the bankruptcy estate. By then, it is too late to do anything.
In another case, the debtor failed to disclose the sale of assets and payoff of liens within two years of filing as required by law. Again, had he disclosed the transactions, his attorney and I (I helped fight an Objection to Confirmation) could have dealt with the expected Objection from a disgruntled judgment creditor. His failure to disclose these transactions and their subsequent disclosure by someone else hurt his case.
People have left off income, property and transactions all in an effort to make their cases look better and pay nothing to creditors. They get caught and not only lose the property or income, they also lose their discharge and sometimes their freedom. Don’t be an OOPS.
There are plenty more examples, just ask any bankruptcy attorney around the country. If you have a story, I’d love to hear it. It will serve as a warning that OOPS is not a word that any bankruptcy attorney wants to hear and that no bankruptcy debtor should ever say.
To quote the Supreme Court, “there is no “Oops” defense to the concealment of assets”.
So, to paraphrase a real estate quote, the most important aspect of bankruptcy is DISCLOSURE, DISCLOSURE, DISCLOSURE.
If you are having trouble with debt and are in metro Richmond, Hanover or Caroline Counties or anywhere in central Virginia, contact Consumer and Bankruptcy Attorney Mitchell Goldstein at mitch at mitchellpgoldstein.com or (804) 592-1674.
Other O posts:
O is for Objection.
O is for Own.
O is for Omitted.
O is for Options to Bankruptcy.
O is for Obligations.
Photo Credit: dingler1109
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