Pandora’s Box: Hiding Assets before Filing a Chapter 7 or Chapter 13 Bankruptcy.
I recently received a phone call from someone with what seemed to be a simple question about a bank account PIN. Two questions later and I became concerned and shocked. As a result, I felt compelled to write this blog.
The bottom-line of my conversation with the caller was this, hiding assets before filing a Chapter 7 or Chapter 13 Bankruptcy is a crime. The caller had wanted to know if his/her son/daughter could hide some money in the caller’s bank account. After an emphatic “NO”, I asked if the son/daughter had sought assistance from an attorney. To my dismay and disappointment, not only was the son/daughter represented, his/her lawyer had advised that it would be “OK” to hide the money. Sensing my astonishment the caller declined to provide me with any further information. I did leave the caller with a thought, namely that not only would the caller’s son/daughter be committing the crime of perjury if they hid an asset from their bankruptcy filing, by cooperating, the caller could be exposed as an accomplice. Bankruptcy case law precedent in rife with examples of what happens when you try to hide assets.
It is NEVER a good idea to try to hide anything from your bankruptcy schedules. Hiding an asset before you file a bankruptcy is a crime punishable by up to five years imprisonment and/or a $500,000.00 fine. 18 U.S.C. §§152 and 3571.
By understanding statutes that have been enacted to protect/exempt certain assets from creditors and from the bankruptcy process, an experienced Chapter 7 or Chapter 13 Bankruptcy attorney can legitimately advise a client in effective ways to protect assets without hiding them, allowing a debtor to effectively protect the bulk of his/her assets without committing a crime.
The filing of a Bankruptcy is an equitable remedy available to those who seek to discharge their debts. In seeking out such an equitable remedy, a debtor must do so with clean hands, otherwise the Pandora’s Box the unwise debtor opens can easily culminate with financial consequences far exceeding the problems the debtor had before filing a bankruptcy.
Seek the advice and guidance of an experienced Chapter 7 or Chapter 13 Bankruptcy attorney before you decide to file a bankruptcy. Many attorneys claim that they “practice” bankruptcy law, unfortunately their definition of “practice” many times leaves much to be desired. Do not be afraid to ask specific questions about the attorney’s experience and about your problems. If the answers do not seem right to you or seem too good to be true, schedule an appointment with another bankruptcy attorney and request a second opinion. My office in Phoenix, Arizona offers free in person or over the phone consultations. You have nothing to lose but your debt.