BAPCPA REQUIRED NOTICE NO. 2
§527(a)(2) of the Bankruptcy Code
No matter the type of bankruptcy a debtor seeks, it is imperative that a debtor be fully honest with his or her attorney and with the Court.
The Bankruptcy Code is very specific about four points that every person filing bankruptcy should be aware of.
- All information that the debtor is required to provide during a bankruptcy case must be complete, accurate, and truthful.
- Some sections of the Bankruptcy Code require debtors to list the replacement value of certain assets. Replacement value should be calculated, after "reasonable inquiry," as of the date of the filing of your bankruptcy case, without deduction for costs of sales or marketing. If the property being valued is for personal, family or household purposes, replacement value is the price a retail merchant (such as a thrift store) would charge for "used" property of that kind considering the age and condition of the property.
- As part of the process of filing a case, the debtor must perform the "Means Test" to determine if the debtor qualifies for a chapter 7 or not. If the debtor doesn't qualify for a chapter 7 but does for a chapter 13 bankruptcy, the Means Test also determines how much the debtor will need to pay to unsecured creditors as part of the chapter 13 repayment plan. As part of the Means Test, the debtor must state, after reasonable inquiry, his or her total current monthly income, and the amount of all expenses as specified and allowed pursuant to section 707(b)(2) of the bankruptcy code. If the debtor wishes to file a Chapter 13 case, he or she must also state, again after reasonable inquiry, his or her disposable income, as that term is defined.
- All the information provided as part of a bankruptcy case can be examined and/or audited by the Attorney General. Failure to provided the required information can cause delay, can result in higher attorney's fees for the debtor, can jeopardize the ability of the debtor to obtain a discharge, and can even result in fines or other criminal sanctions.
It's critical for a debtor to tell his or her attorney everything.