Montgomery County Chapter 7 Bankruptcy Attorney Explains: The Danger of Trying to Hide Assets in Bankruptcy

chapter 7 bankruptcy attorney MontgomeryHiring a good chapter 7 bankruptcy  attorney in Montgomery County will make the process simpler and less stressful. When filing for bankruptcy, you have to fill out a schedule detailing your assets. Many of these assets will be exempt, but those that are non-exempt must be included in your total assets.  These are used in calculating your payoff amounts in chapter 7 or your payments in chapter 13 bankruptcy. Many people are tempted to hide a little and sometimes even a lot so that their property is retained. This is illegal and not to be done.  If a person fails to fully disclose, he could lose the bankruptcy filing, be fined or even go to jail.

Look at Abby Lee Miller, for example. The owner/choreographer of the studio featured in the reality show Dance Moms was recently indicted for bankruptcy fraud. Miller is accused of hiding over $755,000 in earnings from the courts; she could face penalties of $5 million in fines and up to five years in prison. Reports say that she filed for bankruptcy in 2010 as her show was starting, but she never revealed the income to the courts. The reality star is charged with bankruptcy fraud and concealment of bankruptcy assets, among other charges. The case is still ongoing.  Famous baseball player, Lenny Dykstra faced a situation in which he was not honest with the court and has been jailed.  Many people have many fewer assets; the clear lesson is that you can really get into big trouble. Enlist the services of a good chapter 7 bankruptcy attorney in Montgomery County for solid advice and guidance when filing for bankruptcy.

Trustees are trained and experienced at investigating possible bankruptcy fraud. Some common ways people try to hide assets are:

  • “Giving” property to a relative or friend to hold
  • Transferring property to someone else
  • Creating false paperwork to mislead court about value
  • Lying about assets or omitting them

If the trustee discovers the acts, several things could happen:

  • The bankruptcy case could be dismissed.
  • The debtor may receive a discharge, but certain debts would be non-dischargeable and any balances left unpaid would still be owed.
  • The discharge, if already approved, could be revoked, even up to a year after the case closes.
  • You could face criminal charges.

Sometimes filers inadvertently omit assets. If you have forgotten to include an asset, such as lottery winnings, retirement benefits, or co-owned property, you can file an amendment. In such a case, where you alert the court to the omission, the court will recognize that no fraud was intended and simply amend the case.

Bankruptcy Attorney William D. Schroeder, Jr. has over 30 years of experience helping people with chapter 7 bankruptcy in the Montgomery County area. He will guide you through the process, advise you of what is exempt and warn you about non-protected assets as well as any activities that could get you into trouble. There are alternatives to Chapter 7 bankruptcy and these can be used if your circumstances or preference is not to file. He can also help you to keep as much of your property as possible and help you get back on your feet financially. Contact us today at 215-822-2728 for a consultation or information.