The schedules and statements a debtor must file in New York bankruptcy case require the debtor to affirm that they are true to the best of his or her knowledge under penalty of perjury. This is something debtors would expect because the threat of perjury crops up in so many other contexts, such as filing income tax returns. Debtors recognize that the forms they submit to a bankruptcy court are held to the same standard. One problem that can arise, however, is when the debtor is filing a short, “skeletal” or “emergency” bankruptcy petition. Such filings are necessarily incomplete and thus risk perjury by the debtor.
Irrespective of perjury, a skeletal bankruptcy comes with two pitfalls. One, debtors who have not completed the pre-bankruptcy credit counseling course will not be able to prove they have complied with the requirement. Already, the case will not be able to go forward. Two, a skeletal bankruptcy will undoubtedly cost more to complete because the debtor will need to supply his or her New York bankruptcy lawyer with all the financial information that’s required to complete the remaining documentation in just two weeks. Last minute deadlines are not something lawyers like dealing with (if they can help it), and they may charge more for emergency work. Moreover, lawyers may not want to take the case to begin with because if the debtor waited so long, then there’s a good chance he or she will not be able to produce the necessary documentation in time.
As for the perjury problem, the most likely place for it to appear is in the list of creditors. Debtors are required to identify all of their creditors to the best of their knowledge. In a skeletal bankruptcy, which is mostly designed to prevent foreclosure, debtors might be tempted to list their mortgage lenders to ensure that the automatic stay applies to them. In nearly all circumstances, debtors owe money to other creditors—usually for credit-card debt.
The intuitive solution is to simply amend the schedules once the debtor is in a better position to identify them, but by that point the damage is done. Amending a schedule with a knowingly false declaration does not cure the fact that the debtor knowingly issued false statement. Consequently, debtors must be sure of all the debts they owe if they are to attempt a skeletal bankruptcy.
Bankruptcy judges might not be so concerned about whether an amendment to a bankruptcy schedule indicates intent by the debtor to defraud the court, particularly if the goal of a filing is to stop a sale. Although some judges are more vigilant than others, I have never seen a debtor get into trouble in cases where they listed all their debts in their schedules. The bankruptcy process has plenty of ways to deter bankruptcy fraud and other misbehavior by debtors. These contingencies, however, do not excuse debtors from taking “skeletal” petitions to “shoddy” petitions.
If your financial situation is dire and you feel you may need to file bankruptcy soon, then discussing your circumstances with an experienced New York bankruptcy lawyer can help you strategize the best course of action and avoid further pitfalls like making false statements under oath.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/
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