When you file for bankruptcy, you must list everything that you own and all of your debts. Some filers attempt to hide their assets from their bankruptcy trustee, either by lying, transferring assets into someone else’s name or creating fake liens or mortgages to devalue their property. Carelessness in filling out schedules and not disclosing asset transfers from within a year of filing can also be considered hiding assets.
Some others might forget to list certain assets. Lawsuits, lottery winnings, trusts, retirement benefits, inheritances and co-owned assets are some examples of common assets that people forget to list.
The Consequences of Hiding Assets
Trustees have a very keen eye for hidden assets. They could discover hidden assets through a debt review, public record searches, online asset searches, payroll slips with deposits into unlisted accounts, bank records or tax returns. If you are caught, there are several consequences. Hidden assets cannot be discharged, meaning you will continue to owe debt that you were trying to get rid of through bankruptcy. Your discharge can be revoked, as well. Worse, you could be charged criminally, as your bankruptcy filing is made under penalty of perjury. You could be fined up to $500,000, go to prison for up to five years, or both.
Suppose you make an honest mistake, though, and legitimately forgot to list an asset. In this case, you should speak to your trustee immediately to disclose the new asset. The courts will not deny your discharge if your failure to disclose was not done in an attempt to hinder, delay or defraud creditors. For more information on bankruptcy, visit our bankruptcy FAQ.
Judd Law Firm – Your Gateway to Financial Freedom