Whether you are an individual or a couple filing a bankruptcy petition, in order for your debts to be cleared off your credit, you must disclose every single one of your assets. It is crucial for anyone filing bankruptcy to understand that the law requires 100 percent honesty regarding assets. Any attempt to conceal resources that you are in possession of can result in extreme penalties.
What happens if you have an asset that holds significant sentimental value and you want to protect it from the bankruptcy? You might believe that the court cannot take an asset away during bankruptcy if you refrain from declaring it. However, anyone who attempts to conceal assets is committing perjury, which is a crime punishable by law.
There are many ways that assets can be concealed, including:
- Retitling, or transferring an asset into another person’s name
- Devising a fake mortgage and creating a lien to devalue a property
- Stashing money or other valuables in a safe deposit box
- Transferring assets to heirs to protect them
Bankruptcy trustees are excellent investigators and they often track down assets that have been hidden. A simple review of public records, bank statements, debt records, tax returns, or profit and loss statements could reveal possible assets. A quick online asset search can establish if an asset has been transferred or obscured. There are several possible consequences a bankruptcy filer can face if it is determined they attempted to hide assets.
First of all, any assets that are not properly reported cannot be discharged in the bankruptcy petition. Additionally, the discharge can be revoked altogether if hidden assets are found. The worst part, though, is facing the possibility of criminal penalties due to perjury, which is punishable by up to five years in prison and/or a fine of up to $500,000.
Assets that bankruptcy petitioners commonly forget include:
- Co-owned assets
- Retirement benefits
- Lottery winnings
What will happen if you honestly forget to divulge an asset?
There are times when a filer makes an honest mistake when listing assets. It is possible that an asset is legitimately forgotten, or sheer carelessness may lead to neglecting to disclose something. Therefore, it is crucial to take time and consider all of your assets carefully and intricately before signing off on it.
Obviously, no one is perfect. If an omission was made without malicious intent, the filer should let the bankruptcy trustee know immediately. As long as the exclusion was not made in an attempt to defraud, hinder, or obstruct creditors, the discharge should not be denied.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.