Attorney Cynthia LawsonNew Bankruptcy Forms and Rules become effective December 1, 2015. There are several major changes to the forms, but the one I find the most interesting is the new Declaration under Penalty of Perjury in the new forms.

Declaration Under Penalty of Perjury

The legal definition for perjury is to make a false statement under oath or its equivalent during a legal proceeding.  The governmental entity proving perjury in a legal proceeding must show that the false statement was material or relevant to the legal proceeding and that the witness had the specific intent to deceive. Perjury is a crime in both federal law and state laws.

In the old bankruptcy forms, the person filing a bankruptcy is required to:

“Declare under penalty of perjury that I have read the foregoing summary and schedules, consisting of ___ sheets, and that they are true and correct to the best of my knowledge, information and belief.”  

The new bankruptcy forms have a more strict statement stating:

“Under penalty of perjury, I declare that I have read the summary and schedules filed with this declaration and that they are true and correct.” 

The phrase “to the best of my knowledge” has been removed.  The comments to the new rules states, “The phrase ‘to the best of my information and belief’ has been deleted from the declaration in order to confirm to the language of 28 U.S.C. § 1746, which is the federal statute on perjury.

The removal of the portion that says “to the best of my information and belief” makes the statement stricter or harsher for the person signing the schedules and statements.  If a person is declaring the documents are true to the best of his knowledge and belief, he is stating that after a reasonable investigation he is saying the documents are true. The new forms are stricter in that the person signing the forms is stating they are true and correct.

Less Room for Error

This revision of the forms is generally believed to remove the “wiggle room” from the complete disclosure requirement of the bankruptcy schedules and statements and allows the federal government to find it easier to prosecute someone for bankruptcy fraud.  The schedules and statements also require that you sign a statement that says “I understand that making a false statement, concealing property, or obtaining money or property by fraud in connection with a bankruptcy case can result in fines up to $250,000 or imprisonment for up to 20 years, or both. “

It is important to know what you are going when you file bankruptcy, it is a legal proceeding and as such there are many pitfalls that may not be known or understood by the person filing the bankruptcy petition.  Always consult with a knowledgeable lawyer before filing a bankruptcy case as you don’t want a bad situation of owing debt in a civil context to become a bankruptcy fraud issue in a criminal context because you or your attorney did not understand the entire bankruptcy process.

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