The Dangers of Hiding Assets in Bankruptcy
In the USA today, roughly eight out of every ten American citizens are in some form of debt. This means that there are millions of people from coast-to-coast who owe money, whether it be to another person, or entity.
Out of those millions of people who have debt, there are some for whom the debt is overwhelming, and for them filing for bankruptcy can be just the lifeline they need in order to find a path towards financial restoration, security, and peace of mind. However, even when it is one of the best paths out of the circle of debt, the bankruptcy process can still be a scary path to follow. Some People are afraid to loose everything so they resort to hiding assets in Bankruptcy.
Acting Out of Fear
Because the path of filing for bankruptcy can be a frightening one, some people resort to acting out of fear when it comes to the details about the filings. Some people, motivated by the fear of losing assets try and hide assets during the process of filing for bankruptcy. While the idea of hiding assets seems like a plan that could work, doing so can come with very serious consequences later on in the bankruptcy process. Because the consequences for hiding assets during a bankruptcy filing can be severe, it is important to keep in mind that honesty is always the best course of action when looking to file a bankruptcy case.
How Are Assets Hidden During a Bankruptcy?
When going through a bankruptcy, some people try and hide assets that they are afraid of losing. While this is not a good idea, some people under the pressures of debt – hounded by calls from creditors and debt collectors – can see no other way of making sure they do not lose everything. The following are some of the ways people hide assets during bankruptcy:
Lie About Assets: One of the most common ways in which people try to hide assets during a bankruptcy is by simply lying about the amount of assets they own. One of the ways people do this is by transferring certain assets to be under the name of someone else, or even by giving the assets to others to hold onto throughout the bankruptcy proceedings.
Devalue Assets: Some people going through bankruptcy try to diminish the appearance of their assets value. One of the main ways people do this is by creating fake mortgages in order to give the appearance that an asset has no value.
Transferred Assets: Some people transfer assets right before bankruptcy in order to not have to declare them. However, a failure to disclose any asset that has been transferred before the bankruptcy can be looked upon as hiding assets.
Finding Hidden Assets
Something that is important to remember when going through a bankruptcy is that the bankruptcy trustee that is assigned to your specific case is bound to be a well-trained, and highly-skilled person who will be looking for any sign of possibly hidden assets or non-disclosures.
The bankruptcy trustees go about finding hidden assets by taking a close look at your debts, as well as doing public record searches, online analysis, tax returns, review reports from former spouses or friends, as well as payroll slips that may show deposits into banks or accounts that you have not listed in your bankruptcy papers.
With all of the information so easily accessible to the bankruptcy trustee, it is virtually assured that they will find any hidden assets you may have.
Asset Penalties During Bankruptcy
There are numerous punishments and penalties when it comes to the discovery of hidden assets. One of the most common of these penalties is your inability to be allowed to claim your right to any hidden asset that is discovered, or any asset that you failed to list as an asset during the bankruptcy. If the bankruptcy trustee discovers that you have hidden assets, your bankruptcy will not allow you to discharge your debts, which means you will go forth still owing the complete amount of unpaid debt throughout the bankruptcy.
Revoked Discharges: Your bankruptcy trustee has the ability to revoke (or take back) your debt discharge all the way up to one year after your discharge was originally processed. Through this process, you will also lose the future ability to have those debts discharged through any future bankruptcies. This means that being caught with hidden assets and having your discharge denied means you will be unable to have the previously revoked debts discharged through any other bankruptcy filings or proceedings.
Criminal Charges: The hiding of assets through a bankruptcy procedure can also result in criminal charges for bankruptcy fraud. Those who face these charges can be required to pay fines up to as high as $250,000, and can even face up to 20 years of imprisonment.
A bankruptcy attorney will be able to determine more about your situation and the types of debts that could be discharged. Working with a bankruptcy attorney can provide you with the debt relief solutions that you need to start experiencing less stress in your day-to-day life due to debts. Contact Bruner Wright, P.A. today for a free consultation with regards to your debt issues!