The following program was produced by the United States Courts. A debtor must be very accurate in his or her dealings
with the court, including filling out the statement of financial
affairs and schedules accurately. These papers and a debtor’s testimony at the
341 meeting are sworn to under penalty of perjury. There can be severe consequences
for violating this duty. Let’s hear from a bankruptcy judge: Judge Paul
M. Glenn. “Bankruptcy is not a step to be taken lightly or casually. It’s a serious event. It has some real benefits. I mean it will
help people save their homes, it will help people relieve themselves
from overwhelming debt. But, along with those benefits there are some
serious responsibilities that go along. There’s a petition and financial statements
that have to be filed when a person files their bankruptcy case. And these are signed under oath, these are sworn
documents. They’ve signed under oath and under penalty
of perjury. Sometimes people will transfer vehicles or personal property or things
to their relatives or their parents or their kin to hold for them for a period
of time while they go through bankruptcy. That is clearly a non-disclosure of assets
and is a bankruptcy fraud. So any transfers that have been made within the last period of time have to be
disclosed. In addition to the oath that goes along with the signature, all
the papers are signed under one of the rules of the bankruptcy courts;
and that is, the signature is a certification that to the best of the person’s knowledge and
information and belief, the representations are accurate, the facts are accurate. The consequences of not being candid and not being truthful on the schedules: there’s a criminal law that says that if anyone files a petition or files a
document that makes a false or fraudulent representation then they are subject to criminal prosecution, which it provides for fines or imprisonment
even up to five years, for both of those. So it’s a serious crime if there
are material misstatements that could be prosecuted. The consequences of fudging are just too severe to risk. You risk the discharge, you risk committing a crime. And the chances are likely
that you’ll get caught because the trustees who review these schedules in the
trustee meetings review thousands, and they see thousands
of people. They know the questions to ask. The questions that they ask in the meeting
have to be responded to under oath. And then creditors come to the meeting and creditors are
able to have their input as well. The likelihood that non-disclosures will be
found, and if they are, then there are serious consequences.
Sloppiness and gross negligence are among those criteria that will lead to the conclusion that the omission is intentional.
Take your time, get it right, and be honest.”