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Disclosure of Information in Bankruptcy Cases

Published June 12, 2013 by Sasser Law Firm

In bankruptcy filings, debtors are required to disclose a significant amount of detail regarding their financial position. The consequences of failing to make adequate disclosures can include denial of discharge, dismissal of the case, fines and even imprisonment. The different tools available to parties in interest (e.g. a trustee, the Bankruptcy Administrator, a creditor, or a co-debtor) who want to review the debtor’s financial position include but are not limited to:

  1. Required testimony by the debtor at the 341 meeting of creditors;
  2. Additional requirements for testimony at a 2004 examination (similar to a deposition);
  3. Requiring testimony persons with knowledge of the debtor’s financial position including but not limited to a family member, business associate or financial professional;
  4. Obtaining records from the debtors including but not limited to tax returns, bank statements, credit card statements, and personal financial statements;
  5. Obtaining records directly from financial institutions [e.g. banks] or financial professionals [e.g. accountants] that the debtor has transacted business with;
  6. Obtaining transcripts from Internal Revenue Service;
  7. Inspection of tangible assets owned by the debtor;
  8. Public records searches including but not limited to court records, deeds, property tax records, voter registration, corporate filings with the Secretary of State, prior bankruptcy filings and motor vehicle registrations;
  9. Google searches;
  10. Review of debtor’s Facebook page for review of assets and spending

Because the impact of inadequate disclosure is so significant and because the potential of detection for erroneous or inadequate disclosure is so high, a debtor should be attentive and vigilant regarding the disclosures that are made.

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