Client Bulletin: Disclose All Your Assets in Bankruptcy

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

NOTE TO SELF- DON’T WEAR ROLEX WATCH TO YOUR BANKRUPTCY MEETING OF CREDITORS!

Especially when you did not disclose it on your bankruptcy schedules!

Yes, in some cases it may be possible to keep a Rolex going through a bankruptcy, but you must list it as an asset, declare its fair value, and claim it as exempt (if you are going through a chapter 7 bankruptcy).

Alternatively, even if you can’t claim property as exempt, you could still keep it if you filed chapter 13, and agreed to pay your creditors at least the value of your non-exempt items (the Rolex); then you can keep your non-exempt property while going through a bankruptcy.

But when this Debtor in Massachusetts, an attorney, filed chapter 7, he listed his ex-girlfriend as a creditor, stating that he owed her $100,000 for various loans she had made to him. He listed assets of a $300 bank account, a classic 1970 Chevy Chevelle that he valued at $9500, but he did not schedule any jewelry. At the Sec. 341(a) Meeting of Creditors, the ex-girlfriend appeared, and told the Trustee that the Debtor did not disclose a Rolex that she had given him. The Debtor was even wearing the Rolex at the meeting! The Trustee told the Debtor to take it off and give it to him, which the Debtor did. It will be sold to pay the Debtor’s creditors.

The ex-girlfriend then filed an objection to the Debtor receiving a discharge on the grounds that he intentionally and fraudulently omitted or undervalued three assets, including the Rolex and the Chevelle (which was worth a lot more). The Bankruptcy Court in Massachusetts denied the Debtor’s discharge, and the 1st Circuit Court of Appeals affirmed the denial of discharge. None of his debts will be discharged.

Lesson To Be Learned from this case: You must disclose all assets when you file a bankruptcy. Even if you do disclose your assets, I would still advise a Debtor to leave his or her Rolex at home or in a safe deposit box; why flaunt it in front of a bankruptcy trustee, or angry creditors at a meeting of creditors? That is just crazy. You think?

Rest in Peace – Nellie B. Black (1915-2012)
Mr. Black’s mother, an amazing lady that lived a long full life, died Feb. 26. She was the artist that painted all of the paintings in the law office, as well as many, many others. She will be greatly missed by all who knew her.

QUOTES

Today I will do what others won’t so tomorrow I can accomplish what others can’t. — Jerry Rice

Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy. — Dale Carnegie

I quit being afraid when my first venture failed and the sky didn’t fall down. — Allen H. Neuharth

A LITTLE HUMOR – THE “WHEN I WAS YOUR AGE” EDITION

Josh loved golf. One day he arrived at a golf course hoping for a tee time, and the starter asked if he’d mind making up a twosome with another golfer, an elderly man who had a grizzled gray beard. Josh couldn’t say no, and they both teed off and started down the fairway.

To Josh’s pleasant surprise, his partner was a very good golfer, and they played a close game. When they got to the 18th tee, Josh saw a tall pine tree standing directly between him and the green.

“You know,” said the old man, “when I was your age, I’d just tee up and hit my ball right over the top of that tree.”

Josh took it as a challenge. He selected his club, teed up, and slammed his ball hard and high. The ball rose into the air, then hit a branch, ricocheted off the trunk, and flew right back to land not three feet from where Josh had teed off.

“Of course,” said the old man, “when I was your age, that tree was only 12 feet tall.”

$$$$ SAVE MONEY $$$$

The rich: Maybe not so different in their buying habits

Affluent consumers don’t become (or stay) affluent by being careless with their money. A national survey of more than 14,000 adults living in households with at least $100,000 in annual household income found that they are driven by value, not price. Here’s how they responded to buying issues:

“When it comes to quality, I believe you get what you pay for” (78 percent agreed)

“Even though the recession is officially over, I am still spending money much more cautiously than I used to” (60 percent)

“I regularly read online reviews of products before making an online purchase” (64 percent)

“When I go shopping online, I usually know exactly what I want to buy” (68 percent)

“I tend to buy based on price, not quality” (only 18 percent).

SOMETIMES YOU SHOULD JUST LET GO

When capturing monkeys for zoos, one technique that experts use is to place a small cage out in the wild and leave a bunch of bananas inside. They close and lock the cage and leave it on the ground, and then go off and hide. When a monkey spies the bananas, it reaches through the bars of the cage to grab one. But the bars are so close together that he can’t pull the banana out. So the monkey stands there, trying to get the banana out, while the hunters run up to capture him.

Moral: Don’t let yourself be trapped because you can’t let go of something that’s holding you back.

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ARE YOU IN CHAPTER 13 NOW?

Always keep the law office updated with your current address, telephone numbers, and email address. We may need to reach you quickly.
You can check on the status of your Trustee payments, how much you still owe on your case, etc., by going to www.13datacenter.com to set up your user ID and password.

Lose job or overtime? Expenses increase? Want to give up property to lower payments? Call the office for a Motion to Modify worksheet. Complete it and fax it to the office at 713-772-5058. We’ll review it and contact you if a change to your plan is possible.