Disclose Everything States Glenwood Bankruptcy Lawyer

Another thing that you have to do is discuss any and all transfers, and this is a bone of contention for most debtors because they oftentimes will try to do things in anticipation of bankruptcy being unaware that what they’re doing is technically fraudulent.  If you have transferred any money or property, for example in Illinois, if you have transferred any money or property to friends or family members over the last four years, in theory a trustee can undo those transactions under what is known as the Illinois Fraudulent Conveyance Act, meaning that if at the time of the transfer, the debtor was insolvent or by the means of the transfer was rendered insolvent, those transactions can be undone. 

That in practical terms means that the trustee can go to the friend or family member and ask for the item back.  If the friend or family member either will refuses to return the item or has already sold the item, then the trustee will sue the friend or family member.  It is a good thing to note going into a bankruptcy just where these people stand because there may be things that can be done to protect those friends or family members. 

You also have to be concerned or I shouldn’t say concerned, but the trustee may be concerned as to whether or not large payments to creditors were made who are unrelated to you, because in that case, if it’s done within the 90 days prior to the filing of the bankruptcy then the trustee can go to those creditors and request the return of those items or their value as under the theory of what is known as a preference.  The idea of a preference is that the debtor preferred these creditors over others and that’s why he gave them money.  These creditors have affirmative defenses pursuant to Section 547(C) of the Bankruptcy Code but that is their problem, not the debtors. 

The problem for the debtor is not disclosing this information because if it is later learned either by the trustee’s independent inquiry or by somebody who in essence rats out the debtor, the debtor could face bankruptcy fraud charges.  Likewise, the debtor can face bankruptcy fraud charges if he fails to disclose assets that he has stashed away.  It is infinitely worse for someone to have to go to his friends and family members and explain that he’s going to jail for bankruptcy fraud because he didn’t disclose certain information than go to them before the bankruptcy and say, “Look, I have to disclose this.  You ought to get an attorney now.”  At least that way you stay out of jail.

The Statement of Financial Affairs section of the petition covers a multitude of things including whether or not a debtor has a safety deposit box, whether he’s moved in the last three years, if he’s made any transfers over the last two years of sums over a certain amount of money, whether he’s made payments over $1,000 in the last three months, all sorts of things.  You need to be prepared to give that information to your attorney as well.

One thing that is crucial that you do at your meeting with your attorney, and frankly after you meet with the attorney, is make sure you ask questions.  I have always advised my clients that the only stupid question they have is the one they don’t ask the attorney.  You need to ask things because if you don’t know what’s going on, you could end up hurting yourself.  And of course, if you don’t disclose things to the attorney, you’re also going to be hurt.  So it’s imperative that you have a free exchange not only of information but of questions. 

Glenwood Bankruptcy Lawyer or call (847) 520-8100.