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Asset Disclosure in Bankruptcy – Honesty

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Full Bankruptcy Asset Disclosure is essential.  You cannot hide assets.   There are serious ramifications if you are dishonest.  Assets can be protected in bankruptcy – but you cannot hide them.

Lack of Honesty – Caught

Here is an example when someone thought they could get away with hiding assets.

While in a Chapter 7 bankruptcy and during a 341a Meeting of Creditors, in the Debtor’s asset disclosure, he mentioned he owned a 1957 thunderbird car and a car storage trailer.  Both of these assets were valued at $90,000.

Shortly after, the Debtor claimed that the vehicle was lost or his son with a similar name had taken the vehicle.  Subsequently, the debtor created false bills of sales in an attempt to show he had transferred the Thunderbird and the trailer to his son.   However, during a DMV search, it was found that the transfer of ownership never took place.

The bankruptcy Court ruled that the 1957 Thunderbird and trailer were assets of the Chapter 7 estate .    Since these two items were included in his  bankruptcy asset disclosure, there were questions that arose.    The debtor was not authorized to transfer ownership.

In the meantime, an IRS Special Agent interviewed one of the debtor’s neighbors.   The neighbor advised that the debtor asked his neighbor to store the vehicle and the trailer on the neighbor’s property.   Within a few months, the neighbor discovered that neither the car nor the trailer was on his property.

This 67 year old debtor was sentenced to four months in prison for concealing assets and lying under oath.   The jury never believed the Debtor’s story about his run-away Thunderbird.     The debtor’s son now has a judgment against him for the Thunderbird and trailer of $90K.

Honesty is mandatory when you file for bankruptcy relief.

I always remind my client’s truthfulness and honesty is absolutely necessary.    If an experienced bankruptcy attorney had pointed this out to their client (if the client disclosed the claim), this could have been avoided.   Assets disclosure is a required part of bankruptcy.    Assets cannot disappear, you cannot give them away or hide them.

There are many implications and ramifications when you file for Bankruptcy.   You should examine the legal representation you choose and always, always be truthful.

Disclosing assets is essential when filing bankruptcy.    Don’t hide assets.

If you need help protecting your assets, call me to see if filing for Bankruptcy is an option for you.   Don’t hide assets.