Full income disclosure essential in bankruptcy cases

Full income disclosure essential in bankruptcy cases

When facing financial difficulties, declaring bankruptcy, whether Chapter 7 or 13, is one of the options Arizona residents can avail to regain control of their financial life. In a Chapter 7 bankruptcy, almost all debts are wiped out by selling some of the filer's assets. In a Chapter 13 filing however, the court determines installments that the filer must make over a specific period of time. Both forms of personal bankruptcy go a long way in easing a filer's financial burden.

When filing for bankruptcy, it is very important for filers to honestly disclose their income. Not disclosing finances honestly may lead to many legal problems, as a top aide to a county circuit court clerk is realizing.

The aide's court documents showed her average monthly income was around $5,000 in her job as a marketing consultant and her monthly expenses exceeded her income. However, she did not disclose the income she received in her new job as an aide to the county circuit court clerk.

Since filers are asked questions regarding their income and disclosure under oath, it is a crime to purposefully convey false information on court documents. It is unclear whether the court clerk employee will be charged with perjury or not, but both she and her representative stated that it was an honest mistake and not done purposefully, as the documents were prepared before she began her new job. Her representative also went to court to correct the mistake and file revised documents.

Filing for bankruptcy to get relief from debt is an option Arizona debtors should keep in mind, but they should also remember that paperwork is the backbone of a bankruptcy case and it is very important to file correct papers painting an accurate picture of their finances. They may consider consulting a lawyer to ensure their papers are correct.

Source: Chicago Sun Times, "County aide didn't disclose government job in personal bankruptcy case," Dane Placko, Patrick McCraney and Robert Herguth, Dec. 13, 2012

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