When thinking about filing a consumer bankruptcy case, a person has a lot to consider. Obviously, they need to know who their creditors are and how much monthly income there is and what monthly expenses they have. But that is just the beginning.
Most importantly, a person must consider their assets. The reason why you want to consider your assets is that you will want to protect them by claiming the proper exemptions. So, you must make a list and disclose all your assets when you prepare your bankruptcy schedules. Most people think they don’t have too much stuff and what they have doesn’t really amount to much, so this list thing will be easy. However, preparing this list may be more difficult than you may think.
People often change jobs, move across the country, get divorced, and experience other life-changing events. So, it is not uncommon when they forget about an old bank account, an IRA at a previous job, or the Robin Hood account that you opened during covid to trade bitcoin. Oh, and we cannot forget the crypto currencies and Iraqi dinar that is set to reset any day now. Yup, those are assets too.
If you fail to disclose these assets, they cannot be exempted, and you have committed a very big mistake in the Bankruptcy Court. For the honest but unfortunate debtor to get a discharge, they must comply with all the bankruptcy code’s provisions. First and foremost, for a consumer debtor, it is honesty and full disclosure of all assets, no matter how big or small. Do people forget about things, I’m sure some do, but it is your duty to think through each item and disclose it.
Therefore, it is important in today’s day and age to disclose PayPal, Venmo, cash app and all those other apps or accounts that you have to the bankruptcy court. You wouldn’t want to go through the entire bankruptcy process only to find out that the failure to list your Venmo account caused you to lose your bankruptcy discharge.
Full disclosure will allow the Bankruptcy Trustee to look at each and every transaction and make sure that you haven’t run afoul of the rules. Likewise, your consumer bankruptcy attorney should have also done the same thing for you. Again, it may seem a bit redundant, but you want to avoid any potential problems when you file your chapter 7 bankruptcy case. For example, let’s say 30 days before you filed for bankruptcy protection, you had a family gathering and you paid the bill out of your checking account. It looks like a very large transaction from the bank statements. But, over the next few days, your family members Venmo the money back to you. Now, the transaction is easily explainable to the bankruptcy trustee, and you have the bank records to back it up. But, if you failed to disclose the Venmo account at all, you will have a tough time explaining this little oversight with any credibility whatsoever.
Again, full disclosure is always the best. If you fail to list the account, you are running afoul of the bankruptcy courts rules and procedures. Once you realize your mistake or oversight, you need to fix it quickly. This is called an amendment. The failure to disclose and the failure to amend could be detrimental to your case. Always air on the side of over disclosure, and you will never have a problem.
If you were thinking about filing a consumer bankruptcy case, please feel free to reach out to us and get our free book: How to Find, Interview and Hire the Best Bankruptcy Attorney. We will send it to you at no charge.
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