A fundamental part of the bankruptcy process, is that the person(s) filing for bankruptcy relief must file schedules, statements and related documents, which are true, complete, and correct to the best of their knowledge, information and belief.
When disclosing the bankruptcy filer’s assets, it is important that all interests in property or assets (even if contingent) are disclosed. However, it is inevitable that from time to time, things may be overlooked or forgotten about.
Bankruptcy Rule 1009 states:
GENERAL RIGHT TO AMEND. A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed. The debtor shall give notice of the amendment to the trustee and to any entity affected thereby. On motion of a party in interest, after notice and a hearing, the court may order any voluntary petition, list, schedule, or statement to be amended and the clerk shall give notice of the amendment to entities designated by the court.
This means that a bankruptcy debtor may amend their petition at any time while their case is open to correct an error, omission, or mistake. If you realize a mistake, it is important to get it corrected in a timely fashion, and you will want to let your attorney know right away.
What Misleading the Bankruptcy Court Can Mean
Mistakes can happen, but you do not want to be seen as misleading the bankruptcy court or your creditors, or else it could result in denial of the discharge in your bankruptcy (and liquidation of your assets or even criminal charges). Normally, it is not a big deal if the correction is brought to your bankruptcy trustee’s attention at your 11 U.S.C. § 341 meeting of creditors. (discuss with your attorney about how to bring it up). But, if the mistake is not corrected before a creditor or bankruptcy trustee files a complaint, then the court may infer “bad faith” that you were trying to hide assets or mislead your creditors.
Signing a Declaration of Penalty Under Perjury
At the end of the day, most mistakes or omissions are harmless for the overall outcome of a case, but if not corrected they can end up in a bankruptcy discharge being denied. You must sign a declaration under penalty of perjury that your schedules are accurate, so notify your bankruptcy lawyer immediately if you have questions or wonder if something needs to be disclosed.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
Experienced bankruptcy counsel will be able to manage your case from start to finish and avoid larger issues that may arise if you make a mistake. If you would like a free consultation about your options, please give me a call at 1-800-551-3292, or go on to https://lifebacklaw.com/ for more information. You will be happy you did.
