During bankruptcy, the filers might be extremely nervous and desperate. This can lead to reporting incorrect assets while filing for bankruptcy in a desperate attempt to safeguard a particular asset. The attempt to hide or provide misleading info about any asset is referred to as concealing an asset. This is more commonly seen in Chapter 7 bankruptcy where the assets of the filer are most likely liquidated. Know more about such bankruptcy terms by logging on to https://www.recoverylawgroup.com/bankruptcy/.
Concealing equals perjury
While filing for bankruptcy, is just not an ordinary form where you list your assets and getaway. There is swearing, a promise, and a signature that certifies the information provided by you in the documentation is accurate to the best of your knowledge. In addition to this, the bankruptcy filer has to take an oath that the information provided is true and best to his knowledge. This oath is facilitated during the lender’s meet which is conducted immediately after the bankruptcy application has been accepted.
Considering all these aspects, by concealing an asset, the bankruptcy filer can expose himself to perjury and a wide array of criminal charges. This might also cost a hefty penalty and some prison time as well. The bankruptcy trustees are on their toes and have large experience in discovering hidden assets. Once found the asset might be forfeited and criminal proceedings for perjury and fraud might be initiated. The punishment in terms of dollars can cost $500k or there could be imprisonment for up to 5 years or both. Hence, there shouldn’t ever be any attempt to conceal your assets in front of the bankruptcy court.
Common practices to escape after being caught
Once caught concealing an asset, the situation for the debtor often becomes quite grim. The two most common approaches, they might use to get away from the situation can be listed as follows-
- Blame the attorney
The first and most common way out of this grim situation is to blame the attorney and try to present it as a filing error. However, like most professional service providers, attorneys have various documents signed and confirmed during the whole process holding the bankruptcy filer responsible for all the disclosures. With the strong paperwork attorneys do, it is highly unlikely a debtor can get away blaming an attorney.
- Dismissal of bankruptcy
The second most common excuse they make to safeguard their concealed asset is to seek dismissal of the bankruptcy case. However, once the concealed asset is discovered and the bankruptcy trustee understands its use in reducing the lender’s debt, the process cannot be dismissed. Dismissal of the case is truly at the discretion of the bankruptcy court and once applied, rarely can a debtor opt out of the same due to unfavorable events like these.
To summarize, concealing an asset is more likely a sure-shot way to liquidate or hand over the asset for liquidation. There are certain exemptions and other ways like an option for Chapter 13 bankruptcy to protect your assets. It is not impossible to protect the assets you need during bankruptcy. Connect to the best attorneys in and around Los Angeles & Dallas, TX on 888-297-6203 now.