February 4, 2011
Bankruptcy Fraud - Hiding Assets
Bankruptcy law, for individuls, is designed to give the debtor a fresh start from unpayable debt and allow the debtor to return to a productive life.
Bankruptcy law, does however, requires that a debtor be truthful about declaring all assets and all liabilities. Hiding assets is one of the most common forms of bankruptcy fraud.
In the bankruptcy petition, the petitioner will be required to list all assets and liabilities. This information will be used by the trustee to determine which assets are "exempt" and the petitioner is allowed to keep and which assets are not "exempt" and must be forfeited to put towards the petitioner's debts. Also, each state has a exemption up to certain amount of assets of any kind that the petitioner is allowed to keep. Often this exemption is called a wildcard. It varies by state. California's wildcard exemption, for example, is currently $21,825.
The most common ways people try and hide assets are:
1. Hiding money in the "Sock Market." That is, stuffing cash in the sock drawer.
2. Transferring real property to others
3. Giving personal property to others to hold, or listing selling prices of items
much less than the true value.
Hiding assets is a risky proposition. Your bankruptcy is going to give you a debt free start and a second chance to rebuild your finances. It isn't worth risking that to hold on to the Jet Ski or the Grand Piano. In addition, at your 341 meeting you will be under oath in open court. During this stressful time, do your really want to be worrying about whether or not you are going to answer a trustee's question honestly or not. Declare everything, don't hide anything, get your bankruptcy discharged and enjoy your new debt free life.