Family loans In Bankruptcy – Disclosure Is The Key To Success
Family loans, pending lawsuits, recent payments, and transfers of ownership… the list goes on. All of these and more need to be disclosed to your bankruptcy attorney. My first job as a Charlotte bankruptcy attorney is to convince my clients that disclosure is in their best interest. I often tell them that in exchange for their honesty and full disclosure, the bankruptcy court offers very powerful relief from financial burdens and the stress they produce.
What’s So Important About Disclosure?
The bankruptcy court is a court of equity. While there are rules, there is also discretion to be exercised by the trustee. The bankruptcy petition gives the client every opportunity to disclose any items which could be construed as assets or income. Together with her bankruptcy attorney, hopefully the client can manage the disclosed income and assets in such a way that the client still qualifies. However, if an issue is not disclosed and the trustee discovers it at the face to face meeting with the client, the client will most likely pay a price for the failure to disclose.
What Happens Next?
If the trustee discovers during the 341 Meeting that there was a failure to disclose, you can count on the trustee heavily scrutinizing all other assets and information on the petition and schedules. This may trigger a request for information related to the client’s financial affairs that goes back further than the typical inquiry the court makes.
Additionally, the client may lose the right to include an item in their bankruptcy estate if it’s not disclosed. For example, if a client has the right to file a lawsuit but fails to disclose that right as a potential asset during the bankruptcy, the client may lose some or all funds they recover in the lawsuit if they are successful, even if the lawsuit is filed after the bankruptcy has concluded (after discharge of debts).
How Will I Know What To Disclose?
My job as a bankruptcy attorney is to educate my clients, and to ask the right questions. I will help you think about ‘income’ in ways which include money given by family to help you through a tough time. I’ll help you to generate a complete list of all items the bankruptcy court may consider to be assets, even though you and I may not traditionally think of them that way: potential money from a lawsuit, a pending tax refund, recent debt forgiveness, etc.
Bankruptcy Rules Are Reasonable
Bankruptcy is about giving individuals a fresh start. You’ll find the process is smooth and the rules are reasonable. Your job is to disclose, disclose, disclose. My job is to make sure I have all the relevant information and then assist you in successfully filing and leaving the burden of financial stress behind.
Financial stress can be overwhelming. I’m here to help. Call 704.749.7747 to discuss your options. The call is free and confidential. If you’re wondering if you qualify, take a few minutes to submit an online Bankruptcy Evaluation and we will call you with the results.