The most common problem on a bankruptcy petition isn't dishonesty; it's forgetfulness. Debtors under stress forget the old account, the co-signed loan, the refund still coming, the money lent to a cousin. Yet the petition is signed under penalty of perjury, and a trustee who finds something missing asks why. As a bankruptcy petition preparer or virtual bankruptcy assistant (VBA), you are often the first person positioned to catch these omissions. This guide covers the hidden assets and forgotten debts that turn up most often on a bankruptcy petition, and how to find them.
Hidden assets: what debtors forget
- Money owed to the debtor: expected tax refunds, back pay, unpaid invoices, and loans the debtor made to friends or family
- Deposits: security deposits on a rental, utility deposits, and prepaid accounts
- Accounts: old checking or savings accounts, credit-union accounts, payment apps, prepaid cards, and accounts held jointly or “for” a relative
- Claims and lawsuits: a pending personal-injury, workers' compensation, or other claim, even if it has not been filed. See our post on tax refunds for one common example of a forgotten expected payment.
- Insurance and retirement: life insurance with cash value, old 401(k) accounts, pensions, and IRAs
- Property in someone else's name or another state: a car titled to a relative but used by the debtor, a share of land, a timeshare
- Business interests: a side business, an LLC the debtor formed and forgot, equipment, and inventory
- Digital assets: cryptocurrency, online balances, domain names, and loyalty points with cash value
- Valuables: collections, firearms, tools, jewelry, and items in storage or a safe deposit box. See How to Properly Record the Debtor's Jewelry.
- Expected inheritances and settlements: certain property the debtor becomes entitled to shortly after filing can still matter, so ask about anyone who is seriously ill or any divorce or settlement in progress, and flag it for the attorney
Forgotten debts: what debtors leave off
- Co-signed loans, including for a child, ex-spouse, or friend
- Old collections and charged-off accounts, and judgments
- Medical bills, which pile up in small amounts with many billing offices
- Payday and online loans, and buy-now-pay-later accounts
- Debts to family and friends, which debtors are often reluctant to list. See A Typical Example of an Insider Debt in Bankruptcy.
- Taxes owed, including income tax due when nothing was withheld. See How to Report Debtor's Income Tax Due When Not Withheld.
- Obligations to former spouses, child support, or alimony
- Student loans and utility or landlord balances
Transfers and payments the trustee will ask about
The Statement of Financial Affairs asks about payments and transfers before filing. Look for gifts, property sold or given away (especially to relatives or for less than it was worth), payments to family members, and large payments to one creditor. The look-back periods differ by type of transaction and by state, so don't try to decide what is safe: list the facts and flag them for the attorney. See also Credit Card Charges Before Bankruptcy.
How to find what the debtor forgot
- Use a recent credit report to catch debts the debtor has lost track of. Compare every account to the creditor list.
- Read the bank statements closely. Look for deposits from unfamiliar sources (income, refunds, transfers), regular payments to a creditor not on the list, and withdrawals that suggest cash or transfers.
- Read the tax returns. Interest and dividend reports point to accounts; mortgage interest points to property; business schedules point to self-employment; and dependents tell you about household size.
- Search public records. Check PACER for prior filings, county records for property and liens, and court records for lawsuits and judgments. Don't forget previous addresses, because debtors sometimes still own property where they used to live. See How to Value Property on a Bankruptcy Petition.
- Ask in layers. One general question (“Do you own anything else?”) rarely works. Ask category by category: “Does anyone owe you money? Do you have an account at any other bank or credit union? Is any vehicle used by you but titled to someone else?”
- End with an open question. “Is there anything you were worried I would find that we haven't talked about?” Debtors often volunteer a surprise at this point.
What to do when you find something
Do not decide whether it matters, whether it is exempt, or how to describe it. Write it down and tell the attorney. A short note is enough: “Debtor mentioned a savings account at [credit union] with roughly [amount] that was not on the intake. Statement requested.” This is exactly the habit that makes attorneys trust you. See How VBAs Can Help Protect Their Attorneys and Unauthorized Practice of Law.
If a debtor wants to leave something off
Never agree. Knowingly omitting or misstating information in a bankruptcy case can be a federal crime, and a preparer who goes along can share the consequences. Keep it simple: “The petition is signed under oath, so I can't leave anything off. I'm going to let your attorney know you have a concern so they can talk it through with you.” Then tell the attorney that same day. Better still, begin with a thorough intake: How to Ask Debtors for Missing Documents.
Catch what the debtor forgot before the trustee does. A bankruptcy petition review checks your finished draft for the items most often missed. And to learn the full intake-to-filing process, explore the Chapter 7 & 13 Bankruptcy Petition Specialist Certification.
Frequently asked questions
Do I have to list a tiny account?
The petition asks for all accounts. Whether something is too small to matter is for the attorney. List it and flag it.
What if the debtor doesn't remember an account number?
Note what the debtor knows (bank name, approximate balance) and request statements or ask the debtor to log in to the account. The attorney will tell you how to proceed.
Is a forgotten asset the same as a hidden asset?
Not necessarily. Many omissions are honest mistakes. But the petition must be complete either way, so treat every discovery as something to disclose.
This article is general education for bankruptcy professionals, not legal advice. What must be disclosed, how assets are treated, and look-back periods depend on the law and the facts. Confirm with the supervising attorney. Questions about our courses? See the FAQ.