Why You Should Not Hide Assets in a Bankruptcy CaseNovember 24, 2021
When you file for bankruptcy, you must disclose all of your assets and income. Failure to do so can have your case dismissed and you may face criminal penalties. If you want the court to discharge your debts, you need to show them your means to repay. Read to know what happens when you don’t disclose all of your assets after filing for bankruptcy:
It’s More Than Just a Case Dismissal
During a bankruptcy case, you need to disclose your assets, including all properties and investment accounts in your name. Some people who want to leave assets off their bankruptcy papers would try to transfer the assets to somebody else or leave them off their disclosure. However, doing so can lead to the following:
- Case denial. Laying on your bankruptcy paper will make it impossible to discharge your debts. Also, you should disclose debts you are allowed to keep, so the court can verify their exemptions.
- Revocation of discharge status. If you successfully discharged your debts, but it’s later found that you did not disclose assets during the bankruptcy proceedings, your trustee can request for the removal of this discharge.
- Inability to discharge these debts in the future. Debts involved in a bankruptcy case that has been dismissed or where discharge was revoked because you hid assets can’t be discharged in the future when you file for bankerly and include these debts.
- Criminal charges and penalties. Lying on bankruptcy paperwork is a form of perjury, which is a fraud crime that can have you spend time in prison for up to 20 years and face up to $250, 000 in fines.
The Trustee Would Know
Although there are a lot of ways you can hide assets during bankruptcy proceedings, a court-appointed trustee has access to different resources to find these hidden assets. The skilled expert tends to handle bankruptcies every day and has come across people who hid their assets before.
To discover hidden assets, a trustee can look at all debts and compare them to the assets listed. Also, they can review public records for any transfer of assets. They can also review your bank accounts and tax records to make sure they line up with your claimed assets. They will notice when you depreciated certain assets in your taxes and hide this during bankruptcy.
A bankruptcy filing can be nerve-wracking and stressful. You need to complete the legal paperwork and doing it on your own makes you prone to making mistakes. This is the reason you must hire a bankruptcy attorney in Hagerstown to help with the paperwork and the bankruptcy process.