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Evergreen Park Bankruptcy Attorney On Disclosing Property On The Petition

Let’s talk briefly about the bankruptcy schedules.  The best rule of thought is to over-disclose things.  That’s not to be taken literally.  For example, listing real property is pretty simple.  What you do is you describe the property by its common address, 1234 Maple Avenue.  You list the value.  If it’s an undeveloped lot, you list the size of the land, one acre of undeveloped property, things of that nature.  You list the value and you list the amount owed pursuant to whatever liens attend to the property. 

However, when you get to personal property, you don’t want to get in the habit of listing in excruciating detail every fork, every spoon and every knife.  You would list such things, for example, as miscellaneous household goods, book collection, retirement account, checking account at XYZ Bank with a balance of X in it.  There may be, in certain more complicated corporate cases, the need to list inventory, but even in those cases you would list 45 pallets of X, 35 bins of Y.  You don’t need to count how many things are in each pallet or bin.

The court just needs a fair representation as to what’s there.  Once the trustee determines that it is looking at an asset it can market, it will then hire an auctioneer to go in, value the property, and then sell it either at an auction or at an online sale.  There is no need to list every chair and every piece of furniture in most cases.  If it is something that does need to have more detail, additional sheets beyond what’s provided on Schedule B can be added. 

There is remedy for corporations under Chapter Seven as well.  Chapter Seven, being a non person, is not required to take the credit counseling course, but it must also have a human filing on its behalf.  Typically this is either the President or the CEO who will sign the schedules on behalf of the corporation and attend the meeting of creditors on behalf of the corporation.  The corporation does not get a discharge.  When the business files the bankruptcy, it must cease operations immediately.  If the trustee believes that he can sell the business as a going concern, he or she may choose to resume operations and keep the business going for the purpose of selling it as an ongoing concern.  That’s a rare occurrence, but it does happen. 

Otherwise, what the trustee will do is look at assets and see what, if anything, he can sell for the benefit of creditors.  Once that process is ended, the case is closed and the corporation does not get a discharge.  In corporate cases, very often you’re going to have a debt that has been guaranteed or co-signed by one or more of the principles.  In those instances, it is important that the principles be advised as to whatever exposure they may have relative to the corporate debts.  There are things such as pass through taxes or trust fund taxes that will go to the principles and for which the principles will remain responsible.  An experienced bankruptcy attorney is going to need to remind the principle of potential exposure he may have for corporate debts.

See Also, Evergreen Park Bankruptcy Attorney or call David Siegel at (847) 520-8100.

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