It’s no exaggeration to say that the bankruptcy laws require every person and corporation to give a full and complete list of their property when they file a bankruptcy case.
Real estate is listed on Schedule A of the bankruptcy forms, and “personal property” (that is to say, everything else besides real estate) is listed on Schedule B. If you guessed that Schedule B’s can sometimes become quite long, you’re right!
Before you file, your bankrupcy attorney will give you a questionnaire on which you write down all of your valuables, along with their estimated worth. Although this is often an exhausting and somewhat thankless task, it is crucial to a successful outcome for your case.
In legalese, any property that isn’t listed isn’t “administered” as part of your “bankruptcy estate.” What this means is that you could literally lose title to the property later if the omission surfaces. the law will consider the unlisted property as part of your bankruptcy estate forever — even afer the case is closed — potentially depriving you of your rights to it.
An extreme example of this recently came out of California. In the Dunning Brother’s Company case, a bankruptcy judge re-opened a case that was more than seventy years old because unreported assets were discovered!
Those assets — the right of way to a portion of railroad track — were the type where establishing a clean title is important even after the passage of decades, but the main point applies to everyone’s case; it is never too late for a court to reopen a bankruptcy case to deal with unscheduled assets!
By Doug Beaton