Hiding property from a bankruptcy court could come back to haunt
you.
Your bankruptcy papers
are signed under penalty of perjury, so you are swearing
that everything in them is true. One of the things
you're swearing to is that your forms are complete,
because the forms ask you to list "all" property, income, and debts. Filing incomplete or inaccurate bankruptcy forms
can lead to your case being dismissed -- or worse,
if the court thinks you omitted information or made
false statements intentionally.
The law is not supposed
to punish those who make one or two honest mistakes.
If you accidentally leave something off your papers
or misstate something on your forms, you can usually
correct your papers or explain the mistake to the
trustee. But if you leave out so much that it appears
that you were careless, the court can find that your
actions demonstrate an indifference to the truth
and can dismiss your case on that basis.
If you deliberately
attempt to hide assets or use a false Social Security
number, it will probably come back to haunt you more
profoundly than your current debt crisis.
List Every Creditor
Bankruptcy can't help
you if you hide information. If you fail to list
creditors, the debts you owe them may not be wiped
out by your bankruptcy discharge. So, be sure to
list every person who claims that you owe them money
-- even if you don’t think you owe them a cent. In
this situation, you can indicate that the debt is "disputed." If the debt is already the subject of a pending lawsuit, the debt can be listed
as "contingent" -- that is, it depends on how the lawsuit comes out.
When your bankruptcy
is finished, you will no longer owe any debts that
have been discharged. If a disputed debt is discharged,
the entire dispute will be irrelevant. The creditor
will be legally barred from collecting anything more
from you regardless of who is right.
Don't Omit Creditors Just Because You Like Them
Some filers consider
omitting creditors whom they like -- such as a relative
or a friendly local business person -- to avoid having
that debt wiped out. This is a bad idea, no matter
how honorable your intentions. Bankruptcy doesn't
allow you to play favorites. In fact, a central purpose
of bankruptcy is to make sure that all of your creditors
get their fair share of what you have, and that certain
obligations (like child support) are not shortchanged.
If the bankruptcy trustee learns that you've omitted
creditors from your list, you'll have to add them,
and it will raise suspicion about other statements
on your forms.
Include Money You May Have Coming to You
When you list your
property on the bankruptcy forms, you must include
not only property you have when you file, but also
property that you may have coming to you. Here are
some examples:
* an inheritance
from a recently deceased relative that you have not
yet received
* stock options, trust funds, or tax refunds
* pensions, retirement funds, annuities, and life insurance, and
* judgments from lawsuits you've filed or could file, arising from
a personal injury or other matter.
All of these are examples
of property that you must list on your forms. You
may get to keep some or all of this property by claiming
it as exempt, but you must list it so that the trustee
has a complete picture of all of your finances.
Don't Deliberately Hide Assets or Other Financial Details
If you deliberately
fail to disclose property, omit material information
about your financial affairs, or use a false Social
Security number to hide your identity as a prior
filer, and the court discovers your action, your
case will be dismissed and you may be prosecuted
for fraud. The punishment for fraud is serious: Jail
time is not unusual for those who try to hide property
from the court and get caught.
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