On Monday, we discussed the case of pop star Toni Braxton, who is accused of fraudulently transferring money to her estranged husband in order to avoid paying back creditors in her bankruptcy case.
Bankruptcy fraud is a crime that can be punishable with prison sentences. Last week, a 51-year-old Kennedy J. Hyde, of New York, received a 27-month prison sentence after a jury found him guilty of concealing $50,000 from the court through an Ohio bank.
When you file for bankruptcy, it is important to be as upfront about your assets as possible. Trustees and creditors can question your disclosures; in Hyde’s case, the FBI was investigating his claim. As we have said before, honesty is the best policy when it comes to bankruptcy proceedings, whether you are filing Chapter 7 or Chapter 13.
Trustees have ways of detecting any dishonest information that may be included in a filing, as most assets have trails of documentation including bank statements. Not disclosing your assets is a punishable crime, as you can face fraud charges.
Often, bankruptcy is the best way to dig out of a financial hole. Filing for bankruptcy allows you to discharge unsecured debts like credit card debt and medical bills. Attorneys and court professionals are not going to be surprised by anything that comes up during a bankruptcy process, as they are use to handling these types of cases, so it is not smart to attempt to conceal assets.
If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.