Nearly eight in ten Americans are in debt, meaning hundreds of millions of people across the nation owe money to another person or entity. For people with overwhelming debt, bankruptcy is a path to restoring their financial security and peace of mind; even so, it can be a frightening process. Because people fear losing their most valuable assets, some of them try to hide assets when filing for bankruptcy. However, hiding assets in bankruptcy can result in serious consequences that affect people down the line.
If you have any questions regarding bankruptcy, contact the Fort Worth bankruptcy lawyer at Huebner Law Firm, PC. To learn why honesty is the best policy in bankruptcy, keep reading:
How Do People Hide Their Assets in Bankruptcy?
There are many ways people try to hide their assets in bankruptcy proceedings. For example, people try to lie about the number of assets they own. People do this by transferring their assets under someone else’s name or giving it to someone else to hold. Other people try to create fake mortgages to make the assets seem like they have no value. Failing to disclose an asset transfer that took place before the bankruptcy could also be considered hiding assets.
However, the bankruptcy trustee assigned to your case will be skilled and trained to look out for any signs of hidden assets. They find hidden assets by reviewing your debts, public record searches, online asset searches, payroll slips showing deposits into unlisted bank or retirement accounts, tax returns, and reports from a former spouse or friend. If you even attempt to hide your assets, the bankruptcy trustee will almost assuredly find it.
Penalties for Assets in Bankruptcy
If you fail to list any of your assets, you might not be allowed to claim your right to those assets once they are discovered. If the trustee finds out that you hid assets, you won’t be able to discharge your debts, and you will continue to owe any amount not paid through the bankruptcy. The trustee can also revoke or take back your discharge, even one year after the discharge date. You'll also lose your ability to discharge those debts in subsequent bankruptcies. This means that once your discharge is denied or revoked for hiding assets, you cannot discharge your debt in another bankruptcy filing. You could also face criminal charges for bankruptcy fraud, requiring you to pay a fine of up to $250,000 and face imprisonment for up to twenty years.
Hiding assets in bankruptcy will lead to serious consequences. If you are facing troubles for hiding assets in bankruptcy, or you have questions about filing for bankruptcy without difficulties, contact the Fort Worth bankruptcy attorney at Huebner Law Firm, PC for a free consultation!