The United States bankruptcy laws require that you must include all of your creditors in your bankruptcy petition. If you owe a debt you should include it. Here are some examples of debts that should be included but that sometimes cause confusion among our clients:
- “handshake” agreement debts to friends or family members
- debts to the IRS, State of Florida or other taxing authorities
- child support obligations
- student loan debt
- traffic fines
- bad check charges
- criminal restitution
If you do not include a debt, any number of bad things can happen. First that debt may not be discharged in your bankruptcy. Second, the bankruptcy trustee could accuse you of fraud, or perhaps even a bankruptcy crime. Third, your case could be dismissed and you may not be allowed to file again for several years.
If you have any question at all about whether or not to include a debt, please ask. Clark & Washington is on your side and we will guard your confidences zealously.
You should also be very careful about paying back creditors – especially friends and relatives – prior to filing for bankruptcy. Under no circumstances should you hide property or sell assets for less than market value.
As our founder, Emory Clark, often says: “I always recommend a free consultation with one of our experienced and helpful lawyers.” We encourage you to take Mr. Clark’s advice to heart and to call us before taking action that could create problems for you.