Understandably, you do not want to part ways with assets that hold both monetary value and sentimental value to you and your family. However, this does not mean that you should go as far as hiding your assets from your bankruptcy filing; there are consequences for doing so. Continue reading to learn whether you will be penalized for hiding assets and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can prevent this from happening.
How will a bankruptcy trustee detect hidden assets?
Essentially, the role of a bankruptcy trustee is to sell or distribute your assets to pay off your creditors. So, they will do a deep dive into all of your assets so they may eventually gain control over them. A bankruptcy trustee may track down your hidden assets in any of the following ways:
- They may match your purchase history with the items in your possession (i.e., a bill from a car dealership but no car in your name).
- They may track down your payroll deposits to unlisted bank accounts or retirement accounts.
- They may conduct a public records search and an online asset search.
- They may evaluate your bank records and tax returns.
- They may request financial reports from your former spouse, business partner, etc.
Will I be punished for hiding assets in bankruptcy?
If a bankruptcy trustee detects a hidden asset(s), they may bring it to the attention of the Kentucky bankruptcy court. With this discovery, you may be penalized in any or all of the following ways:
- You may be unable to discharge your qualified debts.
- You may be unable to discharge your qualified debts in subsequent bankruptcy filings.
- Your discharged debts may be revoked or taken back for up to one year after the discharge date.
In addition, you must understand that you will have to sign off on your bankruptcy schedules to confirm that your assets listings are true and accurate. So when you purposely leave out certain assets from these documents, you may be charged with bankruptcy fraud. The penalties for bankruptcy fraud are generally a fine of up to $250,000 and a prison sentence of up to 20 years.
There are rare circumstances in which individuals honestly forget to mention certain assets in their bankruptcy filing. This is especially common for assets that have yet to be received (i.e., future retirement benefits, potential inheritances, etc). If this is your case, then you must immediately disclose it to the Kentucky bankruptcy court before they accuse you of hindering, delaying, or defrauding your creditors.
You must take the initiative and reach out to a skilled Louisville, Kentucky consumer bankruptcy lawyer at your earliest possible convenience. Our team at Schwartz Bankruptcy Law Center will be happy to serve you.