When you file for bankruptcy in Arizona, you must provide a complete list of your assets. Forgetting to list certain assets can cause serious issues, such as delays or losing the chance to discharge certain debts.
Commonly overlooked assets
Some assets are easy to forget when you compile your bankruptcy inventory. Here are seven commonly overlooked assets:
- Timeshares – Many people forget to include timeshares, especially if they no longer use them or if they have a low market value.
- Future inheritances – If you are entitled to inherit something in the future, you must disclose it, even if you haven’t received it yet.
- Life insurance cash value – If you have a life insurance policy with a cash value, include it in your filing.
- Tax refunds – Any tax refunds for the year in which you file bankruptcy count as assets.
- Personal injury claims – If you’ve filed an injury claim, include any potential settlements in your asset list.
- Real estate equity – You may own property that is partially or fully paid off. This equity must be listed in your filing.
- Cryptocurrency holdings – As digital assets, cryptocurrency can be easy to overlook when listing assets in your bankruptcy filing.
Failing to disclose these hidden assets can lead to serious consequences. If the bankruptcy court determines you deliberately hid assets, it may dismiss your case and impose additional penalties.
Tips for thorough asset inventory
Take your time and be thorough when making your asset inventory. Review your finances, go through old documents, and consult a financial professional if you’re unsure about any asset. You must disclose even seemingly minor or insignificant assets.
How Chapter 7 vs. Chapter 13 treat hidden assets
In Chapter 7 bankruptcy, creditors liquidate assets to pay off your debts. If you fail to disclose an asset, they may sell it to cover your debts, even if it wasn’t listed initially.
In Chapter 13 bankruptcy, creditors do not liquidate assets. However, failing to disclose an asset can lead to a revised repayment plan or dismissal of your case, especially if the undisclosed asset affects your ability to repay under the current plan.
By thoroughly reviewing your finances and seeking guidance if necessary, you can ensure a smoother bankruptcy process and reduce the risk of unexpected issues.
