It cannot be over stated or emphasized enough how important it is for persons seeking a discharge of their debt to fully disclose all of their assets and liabilities and accurately report, describe and value those assets and debts.

Moreover, beyond important, there is a legal obligation to fully disclose and accurately report under penalty of perjury punishable by up to 5 years in prison and a $500,000 fine, or both.

In addition to reporting your current financial situation - your current ownership of real estate and personal property, your wages, expenses, and debts - you will be asked to disclose nearly every transaction involving valuable "things" going back as long as 4 years; 10 years in the case of certain trusts.

Your "assets" include everything you own no matter how much or how little you think an item is worth. "Things" in your possession that were given to you as a gift are your property - it doesn't matter that you didn't pay for them. Unless you are living under a "furnished" lease contract, everything in your home will logically be assumed to be owned by you and not perpetually borrowed from someone else.

You must provide information on everything you have sold in at least the one year preceding the filing of your petition in bankruptcy. The court will want to know what you sold, the name and address of the person you sold it to and the amount of money you were paid for the item. You cannot sell your favorite classic car or electric guitar to the folks next door for one dollar for the purpose of keeping that item out of you bankruptcy. The court can and will undo those transactions - to your and your accomplices detriment.

Transactions made in the prior 4 years between you and any family member or close associates can and will be undone by the court if they are found to have been made in bad faith, for less than reasonable consideration, or for the purpose of hiding an asset or perpetrating a fraud on the court.

Filing a petition in bankruptcy is a Constitutional right but doing so comes with some very strict obligations. Your bankruptcy attorney will guide you through the process and protect your assets to the fullest extent of the law. Listen to him or her. Cooperate and fully disclose and accurately report.

Even gaining a discharge of one's debt is not worth 5 years in the pokey!

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Information provided by Derrick B. Hager - Attorney at Law