Blog Post
Bankruptcy Crimes
- By Mike Daniels
- •
- 01 Apr, 2019
No Asset is Worth a Prison Sentence
One common experience I have over the 32 years I have been practicing in the area of bankruptcy law is clients complaining about all the detailed, fussy little questions I ask while I am preparing their bankruptcy schedules. It can take a lot of time, and I am very thorough (annoyingly so, many clients believe). There is some method to my madness. First of all, the more information I have the more accurate your bankruptcy disclosures will be. Secondly, very disparate pieces of information can often combine in unexpected ways to help me better understand your financial situation. Better understanding your finances makes me better at defending your interest. Thirdly and possibly most importantly of all, there are consequences to inadequate financial disclosures on bankruptcy schedules.
People filing bankruptcy must disclose all of their assets. Sometimes it can be confusing figuring out exactly what is an asset and what is not. The purpose of disclosing all assets is that the Bankruptcy Court may take some assets from bankruptcy debtors and use them to pay back their debts. If you have a million dollars in cash in your bank account (to use a silly example), your bankruptcy Trustee will take that money and pay your creditors. If you only have $100 in your bank account, the Trustee will leave it for you. If you lie about your assets, however, the Trustee can't make an informed decision about whether there are assets he or she should use to pay your creditors. Part of my reason for being very thorough and asking so many questions is so I can be sure you don't have any consequences for leaving assets off your schedules.
Some people, however, take the risk of lying on their bankruptcy schedules. These people can lose their bankruptcy discharge, lose the hidden assets, and can even be sent to jail. Here's a recent story about one of them.
https://kdvr.com/2019/03/17/colorado-doctor-sentenced-to-prison-for-bankruptcy-fraud/
People filing bankruptcy must disclose all of their assets. Sometimes it can be confusing figuring out exactly what is an asset and what is not. The purpose of disclosing all assets is that the Bankruptcy Court may take some assets from bankruptcy debtors and use them to pay back their debts. If you have a million dollars in cash in your bank account (to use a silly example), your bankruptcy Trustee will take that money and pay your creditors. If you only have $100 in your bank account, the Trustee will leave it for you. If you lie about your assets, however, the Trustee can't make an informed decision about whether there are assets he or she should use to pay your creditors. Part of my reason for being very thorough and asking so many questions is so I can be sure you don't have any consequences for leaving assets off your schedules.
Some people, however, take the risk of lying on their bankruptcy schedules. These people can lose their bankruptcy discharge, lose the hidden assets, and can even be sent to jail. Here's a recent story about one of them.
https://kdvr.com/2019/03/17/colorado-doctor-sentenced-to-prison-for-bankruptcy-fraud/