Failing to disclose assets on your bankruptcy petition may constitute a Federal crime, punishable by imprisonment and fines. Your bankruptcy petition should include a complete and accurate listing of all of your assets, debts, income, and expense. The questionnaire that we supply and that a client completes in order to enable us to prepare the bankruptcy petition contains many categories for the listing of assets. Also, when you come to the office to review and sign the petition, you need to check the petition to ensure that all information is included.
A bankruptcy petitioner in New Jersey is also obligated to list all assets transferred within 5 years of the petition filing date. By way of example, you cannot sell your home, keep the money and then seek to discharge your debts. The bankruptcy trustee assigned to your case needs to ensure that your creditors are treated fairly.
I had a case years ago where a client failed to disclose that she had sold her home a year prior to the filing. She had used most of the sale proceeds to pay her sister back for a personal loan. The trustee filed an adversary proceeding against the sister to return the money to the trustee so that the funds could be distributed pro-rata to all of the client’s creditors.
It is crucial that you make full disclosure to your New Jersey bankruptcy attorney so that s/he can advise you whether to file if you have sold an asset within that time period.
The reason that there is a five-year lookback in this State is because of the New Jersey Fraudulent Transfer Act, which allows a creditor to seek to void a transfer for little or no consideration for a period of four years from the date of the transfer. Thus, if I transfer my home to my brother for $1.00, and then file bankruptcy, my creditors can seek to void the transfer.
You may ask, “do I need a bankruptcy attorney”? If you wish to receive a bankruptcy discharge of your liabilities, it is critical that you retain experienced bankruptcy counsel to assist you in navigating these complex issues.