 A debtor must be very accurate in his or her dealings with the court, including filling out the statement of financial affairs and schedules accurately. These papers and a debtor's testimony at the 341 meeting are sworn to under penalty of perjury. There can be severe consequences for violating this duty. Let's hear from a bankruptcy judge, Judge Paul M. Glenn. Bankruptcy is not a step to be taken lightly or casually. This is a serious event. It has some real benefits. I mean, it will help people save their homes. It will help people relieve themselves from overwhelming debt. But along with those benefits, there are some serious responsibilities that go along. There's a petition and financial statements that have to be filed when a person files their bankruptcy case. And these are signed under oath. These are sworn documents. They're signed under oath and under penalty of perjury. Sometimes people will transfer vehicles or personal property or things to their relatives or their parents or their kin to hold for them for a period of time while they go through bankruptcy. That is clearly a non-disclosure of assets and is a bankruptcy fraud. So any transfers that have been made within the last period of time have to be disclosed on the schedules. In addition to the oath that goes along with the signature, all the papers are signed under one of the rules of the bankruptcy courts, and that is the signature is a certification that to the best of the person's knowledge and information and belief, the representations are accurate, the facts are accurate. The consequences of not being candid and not being truthful on the schedules, there is a criminal law that says that if anyone files a petition or files a document that makes a false or fraudulent representation, then they are subject to criminal prosecution which provides for fines or imprisonment even up to five years or both of those. So it's a serious crime if there are material misstatements that could be prosecuted. The consequences of fudging are just too severe to risk. You risk the discharge, you risk committing a crime, and the chances are likely that you'll get caught because the trustees who review these schedules and the trustees' meetings review thousands, and they see thousands of people, they know the questions to ask, the questions that they ask in the meeting have to be responded to under oath, and then creditors come to the meeting and creditors are able to have their input as well. The likelihood that non-disclosures will be found, and if they are, then there are serious consequences to that. Sloppiness and gross negligence are among those criteria that will lead to the conclusion that the omission is intentional. Take your time, get it right, and be honest. Depending on the chapter of your bankruptcy case and its complexity, you may also be required to appear at hearings before the bankruptcy judge. In a Chapter 13 case, you may only have to appear at a hearing for the court to confirm, meaning approve, the Chapter 13 plan. In a Chapter 7 case, you typically will not appear in court and will not see the judge unless an objection is raised or a reaffirmation hearing must be held. A reaffirmation hearing is held when a debtor wants to continue to pay a debt secured by say a car or home furnishings in order to keep the property. Let's watch what goes on in a typical hearing where a judge considers whether a debtor's reaffirmation agreement should be approved. First, the judge will tell you about the consequences of reaffirming a debt as well as your alternatives. Ms. Lopez, the bankruptcy code requires that whenever someone wishes to reaffirm a debt, that I must hold a hearing at which I discuss with you the alternatives to entering into the reaffirmation agreement, the consequences of doing so. I also must make a finding that it's in your best interest and doesn't impose an undue hardship on you. First of all, with respect to the alternatives, one alternative, of course, is reaffirming the debt, and that's why you're here. Another is that I could approve an arrangement where you buy back the car. It's called a redemption based on the value of the car as determined by me. Sometimes that's less than the amount of the debt. The only problem with that is that you have to come up with cash to do that. The third alternative is called a surrender. It gives you the opportunity to give the car back and be free of any further liability. That's something that's worth considering if the car payments were beyond what you could reasonably afford. If you do reaffirm the debt, the consequences are that you'll be liable on the full amount of the debt, and if later on you have financial problems, they can not only repossess the car, but they can put it through the auction and come back against you for anything that's left over after applying the auction proceeds against the debt. Finally, I must find that the agreement's in your best interest and doesn't impose an undue hardship on you. Let me ask you, now that we've discussed those alternatives, do you have any questions? No, Your Honor. And do you still want to proceed? Yes. Before approving the agreement, the judge must make sure the debtor can handle the payments. Okay, now this automobile, as I understand it, is a 2002 Honda Civic. Yes, Your Honor. Are you current on your payments? I am two months behind on my car payments. So you're two months behind, do you have any arrangement where you can catch that up with the lender? Yes, the attorney for the credor told me that they could put those two months down behind at the end of the loan, and they will also be willing to reduce the interest rate to decrease the amount of payments. That's very important, because once you reaffirm the debt, if you are behind, they could come after you immediately for those past two payments. Now, is this a car that you drive personally? Yes. Do you need the car to get back and forth to work? Is your primary means of transportation? I drive it, and I use it to go to work, and I also take my mom to her medical appointments. Okay, very well. Well, based on that, I will find that this agreement is in your best interest and doesn't impose an undue hardship on you. I'll enter an order to that effect. You'll get a copy of that in the mail. In the meantime, just make sure you stay current on those payments. I will. Okay, thank you very much, Ms. Lopez. Thank you, Judge.