Unlike other legal issues, unmanageable financial debt is a problem that many are too ashamed to discuss with their friends and family. This means that many people piece together their knowledge about bankruptcy from unreliable and confusing sources. The result is that there are a lot of misconceptions about bankruptcy. In the next 5 posts we will write about the most common misconceptions that we hear from clients in our office.
Common Misconception #5: Picking & Choosing
Many people believe that they get to pick which debts to "bankrupt." Some clients don't want to report a debt owed to a family member, because they don't want that person knowing about their bankruptcy. Other clients only want to "bankrupt" specific debts but not all of their debts. That is not how bankruptcy works.
Every debt you owe must be completely and accurately disclosed in the documents filed to commence your bankruptcy case. Bankruptcy is not a "pick and choose" proceeding. You cannot not put some debts in and leave other debts out. Intentionally omitting debts from your bankruptcy case may result in the non-dischargability of those debts, the dismissal of your bankruptcy case, fines, or imprisonment for bankruptcy fraud.