What Happens if I File Bankruptcy but Leave an Asset Off the List?

By Tom Streissguth

Filing for bankruptcy protection is a serious legal business; federal law relating to the complete disclosure of information applies. If you are petitioning for bankruptcy, the law requires that you list all of your assets, meaning anything that you own outright, own jointly with a spouse, or have a contractual interest in. This could be something of value or something worthless in your own eyes. Under the law, it makes no difference -- all assets must be revealed.

Discovered Assets

In a Chapter 7 bankruptcy, the court-appointed trustee is authorized to seize any assets belonging to you that are not exempt under the law. If you fail to list a non-exempt asset, and the trustee discovers that asset in the course of the bankruptcy, the trustee has the authority to seize and liquidate it in order to pay your creditors. Assets include property as well as legal claims, such as an insurance claim or a plaintiff's claim in a lawsuit. The asset does not have to be listed on your bankruptcy schedules in order to be subject to seizure.

Denial of Discharge

The ultimate goal of a bankruptcy proceeding is a discharge -- that is, cancellation -- of your debts. This occurs if you follow the procedures and rules and meet the guidelines for declaring assets. In a Chapter 13 case, a discharge occurs after you have completed the repayment schedule, which returns a part of your unsecured debts to your creditors. If the court discovers an undeclared asset in this process, or finds that you have deliberately undervalued an asset, it can deny your discharge. You bankruptcy case ends, protection from legal action by your creditors ends, and you again become liable for the full amount of your outstanding debts.

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The deliberate omission of assets from your bankruptcy petition constitutes perjury. In plain terms, perjury means lying to or deceiving the court, and it's a federal crime. The bankruptcy court can refer this action to the U.S. attorney's office, which can bring criminal charges that can result in fines up to $5,000 and a maximum five years' prison time for each instance of omission. If you simply forgot what you believed was an insignificant asset, or otherwise inadvertently left the asset off your schedules, the court may give you an opportunity to correct the omission by filing an amendment.


When you file the original bankruptcy petition, you also file a list of your property on schedules A (real property), B (personal property) and C (exempt property). You can revise these schedules while the bankruptcy case is still open by filing a Motion to Amend with the court. The motion must list the omitted property, give the reason for the omission, and request the court to allow the amended schedule into the case. The court can deny a motion if it finds the information insufficient or incomplete, or the language of the motion itself improper. It can also issue an order requiring more information, and set a hearing on the matter.

Post-Discharge Motions

You can file a motion to reopen a closed bankruptcy case, unless the court has dismissed the case "with prejudice." You have to provide grounds, which may be the filing of an amended schedule of assets. If the court allows the amended schedule, the trustee may have the right to seize any assets that were omitted and should have been seized and liquidated to repay your creditors. This can also occur on the motion of your creditors or the trustee, if they have reason to believe that you have falsified or omitted information about your assets.

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Schedule F Bankruptcy Discharge


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