Do I Have to List All of My Assets in a Bankruptcy?

We often have clients ask if they are required to list ALL of their assets in their bankruptcy petition. And when we tell that they absolutely must list everything of any value, they then ask how the court will even know what assets they have. Well, the answer is simple – they will know because it’s their job to know.
You see, Chapter 7 Bankruptcy Trustees often get paid more if they find more assets to distribute to your creditors. So, you can be certain that the trustee will do an electronic asset search of every aspect of your life, and all of your belongings will magically appear on a list that the Trustee will then compare to your schedules.
So, no matter how worthless you think it may be –list it. Because if the trustee looks at the asset search and sees that you have title to an old truck you didn’t list that shows up on an insurance policy, or old coin set that you inherited and shows on a probate report, but you conveniently left them off the schedules, then the Trustee may just dismiss you bankruptcy without discharge, or even worse, find that you intentionally attempted to defraud the bankruptcy system. This is not a good place in which to find yourself.
Even with this, we still have some clients say: “But certainly I have some assets that they will never know about –like my favorite rifle, or a bronze statute that my mom gave me for my birthday.” But we have seen assets come to light by the most amazing means. Most valuable assets always have spending traces that they leave in your checking account, credit cards or tax returns. If your credit card records show that you’ve purchased rounds of rifle ammunition every month for the last year, but your bankruptcy schedules don’t disclose the rifle – then just guess what your Trustee will do. Or if the Trustee finds an old homeowner’s insurance policy from five years ago that lists the bronze statue, but you haven’t listed it on your bankruptcy schedules, then you’re just asking for trouble. So, the bottom line is: LIST EVERYTHING. The risk is just not worth it.
DISCLAIMER: This website is designed to provide general information only. Nothing contained herein constitutes legal advice, nor is it intended to offer legal advice. Neither Fidelity Law, nor any participants in the production of this material make any guarantee as to the accuracy or currency of any information contained in or created through use of any link to another website contained herein. Use of this material is not intended in any way to create or even to convey the impression that such use of this material by any person, organization or entity of any nature and/or kind constitutes any attorney-client relationship whatsoever. You should consult a lawyer for individual advice regarding your own situation.