What can happen if I told the Chapter 13 court I wasn't involved in any lawsuits and I really am involved in a personal injury lawsuit? 37 Answers as of January 31, 2013

I recently filled for Chapter 13 bankruptcy. I filed a personal injury lawsuit before filling Chapter 13. I'm young and was not sure I was really in a personal injury lawsuit until I got the paper work in mail. I went back and told my Chapter 13 lawyer about it and it was fine they said. I told them my trustee even asked about any lawsuit when we went to court I told them under oath I wasn't involved in any because I was not sure I was. If I do win any money my bankruptcy lawyer told me not to tell the trustee. Do I need to be concerned because this is a personal injury lawsuit?

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Marc S. Stern
Marc S. Stern | Marc S. Stern
You need to be very concerned. They prosecute people for this type of thing. You also stand a chance of having the PI case dismissed because you did not list it. Your schedules need to be amended to include the action. If your bankruptcy attorney is not ready to file the amendments, get a new attorney. Fast.
Answer Applies to: Washington
Replied: 1/31/2013
Law Offices of Ronald A. Steinberg & Associates | Ronald A. Steinberg, BA, MA, JD
My friend, that is called FRAUD. You need to tell your lawyer, and to file an amended case. Do it NOW. If they find out, you could very well go to jail.
Answer Applies to: Michigan
Replied: 1/28/2013
Law Offices of Mark West
Law Offices of Mark West | Mark West
If you said that under oath that is perjury. Your attorney should not be advising you to lie or keep secrets.
Answer Applies to: California
Replied: 1/10/2013
Paul Whitfield and Associates P.A.
Paul Whitfield and Associates P.A. | Paul L. Whitfield
You are saying you are guilty of misleading the court and not guilty of misleading the court because you weren't "sure" you knew what you were doing. And further that your lawyer tells you to keep the trustee in the dark. I don't know who your lawyer is but any lawyer who will tell you to mislead the court ought to be disbarred you should make a clean breast of all to the court, the the trustee and to any lawyers involved. Make sure your skirts are clear.
Answer Applies to: North Carolina
Replied: 1/9/2013
Stephens Gourley & Bywater | David A. Stephens
You should be concerned unless your claim is so small it is exempt. Even if it is exempt it would be better to amend and disclose the claim.
Answer Applies to: Nevada
Replied: 1/9/2013
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    A personal injury suit would be exempt BUT not disclosing this is fraud. Your attorney is not advising you properly and will harm you when the trustee discovers this. Always provide full disclosure. It is much better to lose an asset than to have your case dismissed and/or be subject to sanctions.
    Answer Applies to: Utah
    Replied: 1/9/2013
    Eranthe Law Firm
    Eranthe Law Firm | Cate Eranthe
    I would be very concerned. You can lose the personal injury award because of your failure to disclose and exempt it. In addition, you could be charged with perjury and risk prison. When you signed the bankruptcy petition and schedules you swore under penalty of perjury that they were complete and accurate. The bargain you made with the law was full disclosure in exchange for your discharge. Do you have a mental disability due to the injury? If so, you could argue that you didn't understand what was going on. There must have been an accident or injury and you must have retained a lawyer so I fail to see how you could not understand. Young does not seem like much of an excuse to me. Further one in roughly every 250 bankruptcy cases is audited and you could be under strict scrutiny.
    Answer Applies to: California
    Replied: 1/9/2013
    The Law Office of Harry E. Hudson, Jr.
    The Law Office of Harry E. Hudson, Jr. | Harry E. Hudson, Jr.
    Under oath. Perjury. Federal prison.
    Answer Applies to: California
    Replied: 1/5/2013
    Law Offices of Sandeep G. Agarwal
    Law Offices of Sandeep G. Agarwal | Sandeep G. Agarwal
    You need to speak to an attorney specializing in bankruptcy matters.
    Answer Applies to: California
    Replied: 1/5/2013
    Lombardi Law Firm
    Lombardi Law Firm | Steve Lombardi
    Your statement needs to be corrected, but your attorney should be involved.
    Answer Applies to: Iowa
    Replied: 1/5/2013
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Contact a lawyer asap.
    Answer Applies to: Maryland
    Replied: 1/5/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    I would be very concerned if I was represented by an attorney that told me not to worry and not to tell. When someone tells me not to worry without explaining why, that is when I start to worry.
    Answer Applies to: Nevada
    Replied: 1/5/2013
    Richard L. Hirsh, P.C. | Richard L. Hirsh
    You have raised a very serious issue. That lawsuit, in which you are apparently the plaintiff seeking to recover money, is an asset which must be disclosed in your bankruptcy filing. If you innocently forgot to disclose it, that would not be too egregious, however, now that you apparently have confirmed that there is a lawsuit, you have a legal obligation to disclose it. In addition, there is a possible very serious consequence of not disclosing it. The failure to disclose it might constitute a defense for the person you are suing and accordingly you could lose the case. Any lawyer who told you not to disclose it, is giving you inappropriate advice in my opinion.
    Answer Applies to: Illinois
    Replied: 1/5/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Yes, you and your attorney would have committed fraud. You should amend your petition and tell your trustee that you misunderstood the question.
    Answer Applies to: New York
    Replied: 1/5/2013
    Atkins & Fife, LLC | William J. Atkins
    You should be very concerned. Failure to disclose an asset on a bankruptcy petition is a crime (perjury, false swearing). Your failure to do so can also bar any recovery in the personal injury case. Your bankruptcy lawyer may be able to amend your petition. Under no circumstances should you mislead the Trustee or the Court as to the existence of this asset.
    Answer Applies to: Georgia
    Replied: 1/5/2013
    Law Office of Sean P Fleming
    Law Office of Sean P Fleming | Sean P Fleming
    Yes, I suggest you disclose this new information to the trustee and copy your attorney as well. Omissions on your bankruptcy petition such as this are under penalty of perjury.
    Answer Applies to: Illinois
    Replied: 1/5/2013
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Yes. You can get in big trouble.
    Answer Applies to: Alabama
    Replied: 1/5/2013
    David F. Stoddard
    David F. Stoddard | David F. Stoddard
    This is a personal injury forum and yours is a bankruptcy question. You bankruptcy lawyer can give you a better answer. You may want to see if your lawyer will put that advice in writing to you so that he cannot deny that you are acting on his advice.
    Answer Applies to: South Carolina
    Replied: 1/5/2013
    Ryan Legal Services, Inc.
    Ryan Legal Services, Inc. | Kevin Ryan
    Yes. You need to disclose this immediately through your attorney. You also must file an application to approve any settlement, and inform the Ch 13 Trustee if you receive a jury verdict in your favor. Most likely some of the proceeds are property of your bankruptcy estate and may have to be paid to your creditors, depending on how much you receive.
    Answer Applies to: Ohio
    Replied: 1/5/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    YES, YOU NEED TO BE CONCERNED. This bankruptcy fraud and your lawyer is 100% wrong telling you lie. You need to come clean with the trustee and amended your Schedules B and C, (assets and exemptions). This could (1) cause your case to be dismissed or converted to ch7; (2) cause you to be denied a discharge; and/or (3) allow the defendant in the PI case to get the lawsuit dismissed. This is very serious and you need to remedy it ASAP.
    Answer Applies to: California
    Replied: 1/5/2013
    Moffa & Bonacquisti, P.A.
    Moffa & Bonacquisti, P.A. | John A. Moffa
    You and your lawyer have an obligation to disclose this to the Court and the Trustee. You should amend your schedules to add the lawsuit. The defendant's insurance company (I'm assuming there is one) will probably check to see if you filed bankruptcy anyway and then you could really be in trouble. I hope your lawyer just misunderstood and didn't really tell you not to tell the Trustee. That is totally WRONG.
    Answer Applies to: Florida
    Replied: 1/5/2013
    Serenity Legal Services
    Serenity Legal Services | Arnold H. Wuhrman
    I have handled several cases in which it later came to light that a bankruptcy filer had not disclosed a lawsuit he or she was involved in. The consequences can be dire - loss of the lawsuit or having to turn over the lawsuit proceeds to the bankruptcy trustee, and potential CRIMINAL prosecution. Your lawyer has a duty to help you bring this matter to the Court's attention. If your lawyer does not fulfill that duty, then he or she is violating the professional rules of conduct, and you should seek out a new lawyer.
    Answer Applies to: California
    Replied: 1/5/2013
    Bulman Law Associates PLLC Injury Law Firm
    Bulman Law Associates PLLC Injury Law Firm | Thomas Bulman
    Yes. You, not your lawyer, will do the federal time.
    Answer Applies to: Montana
    Replied: 1/5/2013
    Ken Love Law | Kenneth Love
    You have to disclose all lawsuits to the Court. But if you are represented, you need to follow their directions and not act against them. If you want to cover yourself, send your lawyer a copy of what you received in the mail along with a letter reminding them that you told them you were involved in a lawsuit.
    Answer Applies to: North Carolina
    Replied: 1/5/2013
    Andrew T. Velonis, P.C.
    Andrew T. Velonis, P.C. | Andrew Velonis
    Yes, you need to be very concerned. I practice both in bankruptcy and personal injury (and have done some criminal representation as well) so I can tell you without equivocation, what you need to do is to come clean, the sooner the better. If you explain that this was just a mistake, you were not sure how to answer the question, and once you realized that you needed to correct yourself, you came forward, then most likely the court will allow you to amend your testimony and allow you to take your exemptions. If you don't, the Trustee can find out at any time, there are several ways in which to do so. Also, there are random audits and referrals to the DOJ, you don't want to be caught up in that. Talk to your bankruptcy lawyer, talk to your personal injury lawyer, and if you are told to keep it quiet, get a new lawyer.
    Answer Applies to: New York
    Replied: 1/5/2013
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Your bankruptcy lawyer is advising you to break the law, which requires you to file schedules which are complete and correct. You can and should have your lawyer file an amendment to your Schedules B and C (which you must sign). Be certain to check that he files the amendment.
    Answer Applies to: Wisconsin
    Replied: 1/5/2013
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    What you have described is called bankruptcy fraud. It is punishable by 5 years in federal prison and a fine of up to $250,000. Do not proceed further without clearing up the record. Consider talking to a competent bankruptcy attorney to determine your rights and obligations. This situation is extremely serious.
    Answer Applies to: Arizona
    Replied: 1/4/2013
    Peters Law, PLLC
    Peters Law, PLLC | Mark T. Peters, Sr.
    I think that you should report this to the State Bar of Idaho to see if your attorney is acting unethically. It may be that his advice is appropriate given that if you do win money in the lawsuit, your payments under the Chapter 13 plan may increase.
    Answer Applies to: Idaho
    Replied: 1/4/2013
    Danville Law Group | Scott Jordan
    I would be very worried that your attorney is advising you to lie to the Trustee. You should immediately advise the Trustee, preferably through your attorney, of the PI lawsuit. It is not hard to find and if not disclosed, could be a reason to dismiss your bankruptcy without discharge. I don't believe disclosing will have much impact on the your C13 Plan and the payments but not disclosing causes suspicion of deceit.
    Answer Applies to: California
    Replied: 1/4/2013
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    Since it is a personal injury lawsuit any damages that are compensatory to you will be exempt. However, you are obligated under the Bankruptcy Code to disclose all of your assets. This lawsuit might be an asset. If you win it will be an asset. Your bankruptcy lawyer should know better than to tell you not to say anything. Failing to disclose all your assets is bankruptcy fraud. In addition, by not disclosing it you are representing under oath that you don't have a claim against these defendants. They can use that to get your personal injury lawsuit dismissed.
    Answer Applies to: Utah
    Replied: 1/4/2013
    Gregory J. Wald, Attorney at Law
    Gregory J. Wald, Attorney at Law | Gregory J. Wald
    it would be very unethical for an attorney to tell you not to disclose this information to the court and the trustee. Remember that you signed your bankruptcy schedules under penalty of perjury. Your bankruptcy schedules need to be amended to disclose the existence of the personal injury claim. If you receive funds while the case is pending, they must be disclosed. Depending on what state you live in, the money from your personal injury case might be protected from creditors. However, even if this is the case, you would still have an obligation to disclose this to the court and to the trustee.
    Answer Applies to: Minnesota
    Replied: 1/4/2013
    Stephen C. Whalen, P.A | Stephen C. Whalen
    You know now - talk to your lawyer about disclosing it thru amending your petition.
    Answer Applies to: Florida
    Replied: 1/5/2013
    Shean Law
    Shean Law | John Shean
    Absolutely! You need to immediately tell your personal injury attorney and your bankruptcy attorney. If the bankruptcy is not finalized it may not be too late to amend your schedule of assets. This could have drastic consequences for your personal injury case.
    Answer Applies to: Indiana
    Replied: 1/4/2013
    Henry, DeGraaff & McCormick, P.S. | Jacob DeGraaff
    Yes, you should be very concerned. I would immediately seek out a new attorney who can deal with this situation. You could potentially risk losing your bankruptcy discharge, having your case dismissed, or even face criminal sanctions for the failure to inform the court.
    Answer Applies to: Washington
    Replied: 1/4/2013
    Scott Goldstein | Scott Goldstein
    Concealing assets in a bankruptcy case is a federal crime that can result in 5 years in jail and/or fines of up to $500,000.00. You need to tell the trustee immediately before you face criminal charges.
    Answer Applies to: New Jersey
    Replied: 1/4/2013
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    You should have disclosed the lawsuit to the trustee when you met him. It is an asset of your BK estate. That said, your attorney is probably right that it will not affect your case. Personally, I would disclose it to the trustee. I might ask my attorney why he does not amend the pleadings.
    Answer Applies to: Colorado
    Replied: 1/4/2013
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    yes you have committed bankruptcy fraud. The money received should go to the trustee for the benefit of your creditors. there are some different things you can do, but it is wrong and you could face 5 years in jail and a 250K fine.
    Answer Applies to: Florida
    Replied: 1/4/2013
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