Do I Have to List All My Property In My Bankruptcy?

Hiding assets from the court can put you in a whole lot of hurt. Getty Images

Yes. Every last stick of furniture, every washcloth, every ficus tree, every dish, every screwdriver must be accounted for in a bankruptcy case. Everything that could possibly have value, and even some things that appear to have no value, must be disclosed to the court, the trustee and to creditors.

Why would anyone care about my washcloths and dishes and tools?

Your creditors probably don't care how many washcloths you have, but the bankruptcy system doesn't make independent judgments about which assets have value.

The system categorizes the assets into real property (real estate) and personal property, then further categorizes the assets into different types of personal property. At the outset of a case, the court, the trustee and the creditors have no idea what might be of value until the debtor discloses those assets. 

How will the property be listed?

Your property is listed on two schedules and may be disclosed on the statement of financial affairs. Schedule A lists all real estate. Schedule B lists all personal property. The statement of financial affairs will ask a number of questions, including whether you have transferred any property out of your name or possession to someone else within the two years prior to filing the present case.

Exemptions

You are allowed to keep certain assets up to a certain value. These are called exemptions or exempt property. These rules vary from state to state. You can keep property after the bankruptcy if it falls under an exemption category and isn’t valued over the monetary limit in that category.

You can also keep non-exempt property that is not worth it to the trustee to sell, or that you essentially buy back from the trustee.

Learn more about exemptions at Understanding Bankruptcy Exemptions.

Property recently transferred

Some property that you no longer own could still be subject to the bankruptcy, but only if you transferred the property to hide it from the trustee or you transferred it for less than its fair market value.

The statement of financial affairs includes a question that will require that you disclose any property transfers during the two years prior to filing, the value and the buyer or recipient.

Penalty for failure to list and disclose

At the very least, failure to list the asset will cause you to lose any exemption on that property that you would otherwise be entitled to.

In addition, failure to list or disclose assets can be a bankruptcy crime, punishable by a fine or by incarceration in a federal prison. It can also be a fraud on your creditors, who may choose to sue you.

Types of property often overlooked:

It’s probably not likely you will forget you own a house, a car or a pet gerbil. But there are many “hidden” assets that could be overlooked as you’re gathering the data necessary to complete bankruptcy paperwork. Check this list (which is not exhaustive) to see if you have any of these often overlooked assets, and make sure you tell your attorney about them. It's always better to disclose the asset- even if you think it has no value- than to fail to disclose and run the risk of losing your exemption, your discharge or your freedom.

Airline miles and other reward programs

Overpaid taxes

Unused gift cards

Accrued vacation pay

Items loaned out to neighbors and others

Debts owed by family or friends

Health savings accounts

Insurance claims

Trademarks or trade secrets

Commissions earned, not paid

Tickets or subscriptions to sporting, music or art events

Security deposits for utilities or rented property

Prepaid legal or medical plans

Cash value of life insurance policies

Unreimbursed business expenses

Balance in PayPal accounts

Overpaid negative balances on credit cards

Alternative currencies like BitCoins

Savings bonds stashed in the file drawer

Business websites and domain names

Sports and country club memberships

Retirement funds

Guns

The right to sue someone for money

Cemetery plots and prepaid funeral plans

Collections and Memorabilia