When you file for bankruptcy, you must provide all information about your assets in your petition. It is crucial that you are to be completely truthful during your bankruptcy asset disclosure, even if it seems tempting to hide some of them. The following is some information about disclosing your assets during bankruptcy:
Why Would Anyone Hide Assets During Bankruptcy?
Many people make the mistake of assuming that by hiding assets in a bankruptcy petition they will not lose them. It is understandable to legitimately forget including an asset that you do not remember. But if you lie about owning an asset, you transfer an asset to another person to retain it, or if you are careless in disclosure, this is all considered concealing assets and can result in severe penalties.
Even worse, if you go to significant means to hide assets, you can face serious legal challenges. An example of significant means includes creating false accounts or mortgages to help decrease the value of your property. Doing anything of this nature is considered perjury in court and could even land you in jail.
How Will Dishonesty in a Bankruptcy Be Discovered?
Hiding your assets is much more complex than you would think. The trustees in bankruptcy are very skilled in detecting any falsehoods in a petition. They will review every bit of information about you and your assets, including examining your bank accounts, tax returns, and your public records. They will easily be able to determine if you have moved assets around or transferred ownership to another person to conceal your assets.
What Happens if Concealment is Discovered?
If you are found to be dishonest in your bankruptcy petition, there are a number of problems you can face. The first problem is that your assets that you attempted to conceal will not be discharged. You will still owe on the debts outside of the bankruptcy, which can be problematic since you were trying to get out of the debt, to begin with. You can also face criminal perjury charges, which result in jail time and hundreds of thousands of dollars in fines.
What If You Truly Forget to Disclose Assets?
There are times when someone can honestly forget to disclose an asset. If you have significant amounts of assets that you are trying to wade through, it can be easy to forget about those that you do not deal with regularly. This can include any assets that are co-owned by another person, retirement accounts from previous jobs, or trusts left to you years ago.
Once you have filed and realized you have forgotten to include your assets, there is a way out without having to deal with the ramifications of concealing assets. You must immediately let your trustee know about the assets so that the bankruptcy can be amended. As long as they believe that you were not intentionally trying to hide them, you should be safe from any problems.
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