A bankruptcy petition is the legal document which is filed with the bankruptcy court when one begins the bankruptcy process. The petition consists of no less than 30 pages in total and is divided into different types or categories of property (real and personal) and liabilities (secured/unsecured/priority).
All property and liabilities of any individual or any entity who files a petition in bankruptcy must include all of their assets and liabilities within the filed petition. Failure to do so can expose one to criminal prosecution for bankruptcy fraud, case dismissal and the like. When in doubt, list the asset or liability. A good faith omission of an asset or liability can be corrected at any time while the case remains open by way of an amendment or amended schedule being filed with the court clerk’s office.
If one has a line of credit that has no balance at the time of filing, it does not need to be listed within the petition. However, one must be sure to list all assets and liabilities whether they are considered good assets/debts or bad. For example, an automobile loan for a vehicle which is to be kept must be noted in the petition along with the value of the automobile. Likewise, a student loan which is current and otherwise non-dischargeable in a bankruptcy proceeding must also be listed within the petition.
Many clients ask if they can keep out of their bankruptcy petition a credit card that has a small remaining balance. My response is that if the credit card has a balance, it must be listed. Moreover, one must remain mindful that if a credit card or other similar debt has been paid more than $600.00 in the sixty (60) days prior to filing, it must be divulged within the petition. Accordingly, I would only approve of any such payment on such a card if it had a very small balance and was the type of card that is widely accepted. Of course, even cards with no balances that have not been listed within one’s petition have been canceled at times by the card issuer.
There is a lot in the way of information specifics such as the value of assets and balance amounts on different debts/liabilities that are contained in the bankruptcy petition. This legal document is signed by the petitioner (the one filing) under the penalty of perjury as being both complete and accurate. Therefore, it is very important that each and every page of the petition be gone over closely and preferably with the aid of legal counsel. At Reinheimer & Reinheimer, you will sit down one-on-one with an attorney who will go through each page of the petition with you to be sure it has been properly completed. Legal counsel will also explain the reasons behind what is being listed and where it is being listed within the petition. After all, we’re all in this together.