Hiding Assets in a Bankruptcy Can Cost You
If you are considering filing for bankruptcy or already have, you want to do everything in your power to follow the law.
One thing that some people consider doing is hiding some of their assets during their bankruptcy. This is considered bankruptcy fraud, definitely not something that you want to do. People often try to do this by transferring assets out of their name so that creditors or the trustee cannot see them during the case. It is important to understand the potential consequences with your case if you even inadvertently commit fraud so that you can avoid it at all costs.
Denial of Your Bankruptcy Discharge
If at any point before, during, or even one year after your bankruptcy, you try to hide, destroy, or even give away some of your assets, the court has the right to deny your bankruptcy discharge. This means that even if things were looking better for you financially, you will become responsible for all of the debts that could have been eliminated by your bankruptcy.
The Property Can Be Taken Back
Even if an act that is considered fraud goes undetected at first, the trustee of your bankruptcy can still get the property back for use within your bankruptcy. Essentially, they can undo the transfer if it was recently completed if you give away the asset as a way to delay or defraud your creditors, or if you give it away for less than it is reasonably worth as a way to unload it after you have taken out more debt than you could afford. Because of this, giving your property away does not actually keep it away from your creditors as you intended to happen.
You Could Go to Prison for Bankruptcy Fraud
Fraud is a very serious criminal activity, and as such, it is taken seriously. If you are found to have tried to hide your assets or even if you have given it away in order to hide it, you can be criminally prosecuted. This type of fraud is considered a federal offense and could result in time in prison as well as some large fines. If you are even suspected of fraud, your case can be subject to criminal investigation. Following the direction of an experienced bankruptcy attorney will help to ensure that your bankruptcy filing goes smoothly.
For more information about your options, speak to one of our bankruptcy attorneys here at Clark & Washington.