When an individual or couple files for bankruptcy, they are required to disclose all of their assets in their petition. It is important for filers to remember that they must be 100 percent truthful when disclosing assets and that they not attempt to hide them. Some people think that by concealing assets, they won’t be taken away by the court during bankruptcy. However, doing so is considered perjury, which comes with a number of penalties which ultimately may end up costing the filer even more.
There are many reasons why an asset may go undisclosed by a filer. These include:
- The filer lied about possessing the asset
- The filer transferred an asset to someone else’s name
- The filer created fake mortgages or liens to devalue their property
- The filer may have been careless in disclosing the asset
- The filer may have legitimately forgotten to include assets they may not have thought of
Bankruptcy trustees are very keen detectives and are not often fooled by hidden assets. All it takes is a public records review, a debt review, a review of bank records or tax returns, or a look at online asset searches to determine whether or not an asset has been hidden or transferred. If a filer is found to have attempted to conceal assets, they face a number of repercussions. Not only will their hidden assets not be eligible for discharge (meaning they will still owe the debt they were trying to get rid of with bankruptcy), but they may also get their discharge revoked. Worse still, they may face criminal charges and penalties for perjury, which is punishable by up to five years in prison and/or a fine of up to $500,000.
Sometimes, though, assets are not disclosed simply because a person made a mistake without malicious intent. If this happens, the filer should immediately disclose the asset to their trustee. As long as the mistake was not made in an attempt to delay, hinder, or defraud creditors, the error should not result in a denial of a discharge.
The following are examples of assets most commonly forgotten in bankruptcy petitions:
- Retirement benefits
- Lottery winnings
- Co-owned assets
Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site www.BankruptcyforTampa.com or call 727-335-7151.