Amending Bankruptcy Schedules

All good bankruptcy lawyers will tell you that it is absolutely critical for a debtor’s petition to be accurate and complete when it is filed with the court.  This is because of the very high penalties attached to filing an incomplete, inaccurate, or misleading bankruptcy petition.  These penalties include dismissal with prejudice to refiling, denial of the discharge, and even criminal prosecution.  As a bankruptcy lawyer, I believe that my most important task is to ensure the accuracy and completeness of the bankruptcy schedules.

But mistakes can happen.  You may have property that you had forgotten about or did not know existed, like an inheritance, a claim against your employer, or something of that nature.  Additionally, filing bankruptcy is stressful and no matter how many times you review your schedules with your bankruptcy lawyer, mistakes happen.  The fact of the matter is that honest mistakes are okay.  You do not want them to happen, but they do and the bankruptcy trustee and the bankruptcy judge understand.

The question is what to do when you find an honest mistake.  Well first and foremost, you need to tell your bankruptcy attorney right away.  The sooner you fix a mistake the less it seems like you were trying to hide something.  You can fix a mistake with an amendment.  An amendment is done by refiling the schedule that contains the mistake, along with a declaration briefly explaining the mistake and verifying the information.  In a chapter 7, the court charges a $26 amendment fee and your lawyer may also charge a fee for his time.  In chapter 13, the amendment is free and any attorney’s fees are charged through the plan.

The other good news is that the bankruptcy rules state that amendments should be allowed.  This means that you do not have to fear the consequences of fixing a mistake on your bankruptcy petition.   This means that you are not stuck in a bind trying to decide is it better to hope no one discovers the mistake.  The answer is that it’s always better to be honest and fix the mistake.

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