Assets and Liabilities

 
When an individual files for bankruptcy protection they are required by law to disclose all of their assets and all of their liabilities.  What exactly does that mean?

Assets are possessions.  They are the things that we own or have some sort of interest in.  Our homes and cars are assets even if we owe the bank money for a lien they hold on these assets.  Our bank accounts, cash in our wallets and even the wallets themselves are all assets.  It is important when an individual files for bankruptcy that they list all of the things they own regardless of how much these assets are worth.  Broken down vehicles, costume jewelry and pets may not be worth a great deal of money, and certainly are not things a trustee would be interested in liquidating, but failure to list these items could put your bankruptcy discharge in jeopardy.

Additionally, individuals are required to list everyone they own money to.  This includes back child support, student loans, credit cards, mortgages and other traditional debts.  It also includes loans owed to your parents, fiance, siblings, business and other non-traditional debts.  Many times debtors are reluctant to list there non-traditional debts out of fear that they will not be allowed to repay the money they owe to these individuals.  In fact, voluntary payment on discharged debts are perfectly legal and while failing to list them will harm your chances at discharge, repaying them after discharge will in no way violate the law.