The vast majority of the cases our Rialto consumer bankruptcy attorneys see are cases involving first-time bankruptcy filers. Most of these people are new to the idea of bankruptcy and don't always understand how it works, which can sometimes have dangerous results. So we were pleased to see a Bankrate.com advice column dated Nov. 30 about the concept of declaring "partial" bankruptcy. There is no such thing as partial bankruptcy, as the column explains -- and trying to achieve this by simply leaving out certain parts of your financial life could get you into trouble. Not only could it get the bankruptcy canceled entirely, but as this columnist points out, it could make the filer guilty of perjury, leading to jail, inability to file for bankruptcy again or other negative consequences.
The letter-writer in this case is someone who has credit card debt and debt on commercial mortgages. He or she wants to file for Chapter 7 bankruptcy, but leave other financial assets and debts untouched. As the columnist says, this is a very bad idea. Bankruptcy is designed to take stock of the individual or couple's whole financial life, including income, debts, assets and recent transactions. It balances filers' assets against their debts in an effort to see how much they can reasonably afford to pay off. If you leave out debts or assets, you are denying complete information to the court and the bankruptcy trustee appointed to oversee this process. Because you sign a statement saying the list is complete to the best of your knowledge, intentionally leaving anything out is perjury. Even leaving out a recent transaction could be illegal, depending on how recent and what type of transaction.
In our experience as Carson personal bankruptcy lawyers, many people do this, or try to do it, with good intentions. Sometimes, they want to leave a debt out because they want to repay the entire debt and believe it could be wiped out in the bankruptcy. Or they might believe an asset shouldn't be part of the bankruptcy because it is owned jointly. This is not necessary; bankruptcy law gives filers a way to deal with these and other common situations without violating a third party's property rights. And, worse, leaving things out can look like fraud to the court. If you have recently given something expensive as a gift, this could still look to a court as if you were trying to hide your assets. At best, you'd have to amend your bankruptcy to include information that was left off. You could also have your case dismissed and legally barred from being reopened for a specific period. And anything that looks like intentional fraud can land you in jail.
Part of our job at Howard Law PC is to guide our clients through these and other potential pitfalls of filing for bankruptcy. Many of our clients propose these kinds of mistakes because of misconceptions about bankruptcy, such as the belief that they will automatically lose their homes. In fact, that is far from automatic and depends on the type of bankruptcy you choose as well as the kinds of assets and debts you have. Our San Juan Capistrano individual bankruptcy attorneys can help clients ensure that they protect what's most important to them, within the confines of the law, by helping them navigate the complicated system of California bankruptcy exemptions and the types of bankruptcy available. We want every client to end the bankruptcy and have their debts discharged with the tools they need to rebuild their credit and start fresh.
If you're overwhelmed by your debt and you know you can't pay it back, you should call Howard Law for help. To learn more or set up a free consultation, call us toll-free at 1-800-872-5925 or send us an email today.