It is very important that information regarding a Debtor’s assets, liabilities, income and personal information be disclosed in its entirety and accurately on bankruptcy schedules. Why? because of instances such as the current fraud investigation into GM’s faulty ignition switches-something that affects potential future liabilities during the pendency of the bankruptcy case, found here
In certain cases, Debtors are hesitant to disclose the nature of assets, particularly if they are not titled, or otherwise disclosed in other documents for fear that the trustee in bankruptcy will either claim such assets or otherwise penalize the Debtor for having assets worth more than can be exempted. Failing to disclose can carry serious penalties, criminal fraud as well as dismissal of the case being the most feared. So, it is best to disclose all current and potential legal and equitable interests in property. Otherwise, having financial difficulties could be only a minor problem in comparison to a criminal fraud charge.