Some Assets in Bankruptcy Have Little Value Other Than Common Sense
Posted By Steven J. Richardson on December 21, 2009
Many times my bankruptcy clients wonder why I ask them to put a value on things like clothing, old furniture, and costume jewelry. Who could possibly want them? They have no real value. I have various answers, but they all boil down to the fact that no matter what its value, what you own is an asset, and it must be disclosed. A bankruptcy petition is a written statement made under oath, and failure to disclose something is at the very best embarrassing and at the very worst a felony that could lose you your discharge.
Bankruptcy trustees look for completeness in disclosure, not just value in assets. A good friend of mine who is a trustee once said to me, “If the debtor isn’t telling me everything about their household furnishings, what else aren’t they telling me?” He will ask a debtor, who did not list a car as an asset or a lease of one, “How did you get to the meeting today?” Or, as one trustee in South Carolina put it, to a debtor who did not list any clothing as an asset, “Were you naked when you signed the petition?” Value must also make sense, even if it is on a distressed, yard sale basis. My friend has also asked, “Are you really telling me that you own a 3,000 square foot house and only have $1,000 worth of furniture in it?”
Please bear in mind when you meet with your attorney to prepare your petition that thoroughness is very important. Disclose everything and work with him or her to make sure that nothing gets left out. The thing to remember is this: it matters not its value; it matters that you own it!
Steve, You make an excellent point here. As a bankruptcy trustee, I am looking for the debtor’s situation to make sense, to be believeable. You have heard me ask the question of a debtor with no car how that got to the hearing. Again, with jewelry, everyone has some jewelry a watch a ring, for guys and women almost aways have soem jewelry. I recognize that most often it has onl;y sentimental value. But if a debtor says they have none I know that isn’t true and I do begin to wonder what else they have left off the schedule of assets.
In places the bankruptcy petition use legalese or at the very least words that many people do not understand. It is the attorney’s job to translate these into plain engilsh. for iinstance, There is a question that asks about “contingent and unliquidated claims” No client is going to know that the question is really asking about personal injuries claims. So the lawyer needs to translate that legalese into plain engilish.