I forgot to list some of my property in the bankruptcy schedules. Should I tell my attorney, and if I do, will I lose it?

  • So today in court my clients leans over to me and tells me that he forgot to list a car that he owns free and clear.  My immediate reaction is, “Oh crap!”  In bankruptcy we can protect one car for each debtor, so long as their names are on title, up to $3,000 in value, based on Utah state exemptions for vehicles.

    But if we haven’t listed a car, we can’t exempt it, and I had already spent my exemptions on two other cars, so I was worried that the chapter 7 trustee would demand that we turn over the extra car to an auctioneer.

    My client then clarified that the unlisted vehicle was a 1990 Chevrolet Blazer that he purchased for $500 being held by an auto shop who had done over $1,500 worth of work on it and was holding it until they were paid.  With their possessory lien against the vehicle, I knew the trustee wouldn’t want it.

    However, in answer to the question, Yes, tell the attorney.  You may lose it, or he may be able to protect it.  But you don’t want to commit fraud and perjury on your bankruptcy paperwork.

    The Utah Code Section Title 78B Chapter 5 Section 506 in its entirety reads:

    78B-5-506.   Value of exempt property — Exemption of implements, professional books, tools, and motor vehicles.

    (1) An individual is entitled to exemption of the following property up to an aggregate value of items in each subsection of $1,000:

    (a) sofas, chairs, and related furnishings reasonably necessary for one household;

    (b) dining and kitchen tables and chairs reasonably necessary for one household;

    (c) animals, books, and musical instruments, if reasonably held for the personal use of the individual or the individual’s dependents;

    (d) heirlooms or other items of particular sentimental value to the individual; and

    (e) firearms and ammunition not included in other exemption categories in the amount of $250 per individual, and not more than $500 per household.

    (2) An individual is entitled to an exemption, not exceeding $5,000 in aggregate value, of implements, professional books, or tools of the individual’s trade, including motor vehicles to which no other exemption has been applied, and that are actually used by the individual in the individual’s principal business, trade, or profession.

    (3) (a) As used in this Subsection (3), “motor vehicle” does not include any motor vehicle designed for or used primarily for recreational purposes, such as:

    (i) an off-highway vehicle as defined in Section 41-22-2, except a motorcycle the individual regularly uses for daily transportation; or

    (ii) a recreational vehicle as defined in Section 13-14-102, except a van the individual regularly uses for daily transportation.

    (b) An individual is entitled to an exemption, not exceeding $3,000 in value, of one motor vehicle.

    (4) This section does not affect property exempt under Section 78B-5-505.

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