Filing for bankruptcy is a tremendously stressful time. So, when frazzled, things tend to fall between the cracks. What if it turns out you forgot to include an asset in your bankruptcy filing?
Or, what if something completely out of your hands happens and one of your assets skyrockets in value? Luckily, there are a couple steps you and your bankruptcy lawyer can take to remedy the situation. In an effort to alleviate any of the panic you may be feeling right now, let’s get right to it.
File an Amendment
Well, first things first. If you accidentally forgot to include an asset in your filing, the court will generally allow you amend your bankruptcy petition to include the omitted asset. If your bankruptcy case has been closed, however, you will need your lawyer to file a motion to reopen the case and amend your bankruptcy petition. In that motion, you’ll list the omitted asset, provide the reason for the omission, and ask the court to allow the amendment into your case.
So, the same will hold true if you included an asset, but accidentally undervalued it. Simply ask your attorney to file an amendment and proceed from there. And, believe it or not, these things happen. Take a look at the rapper 50 Cent. Nowadays, bitcoin is on the tip of everyone’s tongue. But, back in 2014, when people scarcely talked about it, 50 cent decided to accept bitcoin as payment for one of his albums. Apparently he didn’t need the money at the time because he forgot all about it, until recently.
He’s estimated to be sitting on at least $7 million in digital currency these days. In a bankruptcy situation, it would be time to run, not walk, to your attorney’s office and file an amendment.
Also, can you believe how much the land around the Raiders stadium increased in value after they purchased the site? So, if you were already in bankruptcy proceedings, it would hardly be your fault that your property increased well beyond what you recorded on your schedules. And, remember, you’re going to have your schedule A for real property, schedule B for personal property, and schedule C for exempt property.
If you should experience any unexpected increases in property value, you and your attorney can amend your schedules as long as your bankruptcy case is still open.
These Things Happen
Intentional omissions have major, major repercussions. The courts could liken it to perjury and you can possibly face serious fines. So, intentionally omitting an asset is counter-intuitive when you’re attempting to create a clean slate.
But, accidental omissions happen. In the case of 50 Cent, well, who knew the volatile cryptocurrency market would skyrocket the way it has in the last year?
And, in the case of those lucky landowners around the Raiders’ stadium, who knew that would bring such an enormous boost to the local economy? So, there’s always a pathway to proper filing, even after an innocent omission. With the help of your attorney, there’s no need to lose too much sleep.