Unfortunately, hiding assets in bankruptcy can get you into a lot of trouble.
Here’s why.
The court considers bankruptcy a transparent process. It grants you debt discharge, but you must be completely upfront about your financial situation to receive this benefit. Failing to fully disclose any of your assets, even if you do so unintentionally, puts you at risk for a variety of penalties.
Failing to disclose information about your assets to the bankruptcy court can result in:
It’s the trustee’s job to uncover all of your assets. They will review your debts, conduct public record searches and online asset searches, review pay stubs, bank records, and tax returns, and collect reports from co-workers, former spouses, business partners, and more. Should they suspect that you hid assets, they’ll file a lawsuit called an adversary proceeding with the court to recover those assets.
Check this out if you’d like to learn more about the role of the bankruptcy trustee.
Mistakes happen. Unfortunately, even honest mistakes can get you into trouble when it comes to filing bankruptcy.
In most cases, you won’t go to jail for an honest mistake. If you honestly forgot to list an asset and you weren’t intentionally hiding it, you’ll likely be able to fix the problem. However, you can’t claim your right to the asset if it qualified for exemption.
If you’ve forgotten to list an asset, you should notify your attorney and the court as soon as possible. You’ll need to file papers to disclose the asset immediately. Usually, the bankruptcy court doesn’t deny or revoke your discharge if you can show your failure to reveal the asset wasn’t intentional. It’s always better for you to alert the court before the trustee discovers the asset.
The last thing you want to do when filing for bankruptcy is to invest any more scrutiny than necessary by the court and the trustee. Working with an attorney reduces the risk of having problems and missing out on the benefits of bankruptcy.
For more information or to schedule a consultation to discuss how to handle your assets and avoid problems, contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.
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