Most debtors considering bankruptcy are less than enthusiastic about the prospect of other people knowing about it, especially friends and family. But while, many debtors would be more comfortable filing for bankruptcy without telling family and close friends, it may not be advisable to keep a bankruptcy filing secret. Here's why:
- If a family member or friend loaned you money and you have not repaid them, you must include it in your bankruptcy filing. What that means is that you must list your family member or friend as a creditor.
- If you loaned or gave any significant amount of money or assets to a friend or family member you will need to disclose this in your bankruptcy filing. For example, some debtors have transferred property to friends or family members before considering bankruptcy because they wanted to protect it from creditors or for another reason. Unfortunately, the bankruptcy court may view the transfer as "not allowable" and demand that the property be returned to the bankruptcy estate. This needs to be discussed with the family member/friend and your bankruptcy attorney before filing bankruptcy.
- If a friend or family member, such as a parent transferred property or other assets to you before your bankruptcy filing, those assets may be liquidated to repay creditors.
Please speak to your Dallas-Fort Worth bankruptcy attorney, family and friends to determine how asset transfers will be treated in your bankruptcy case.