Bankruptcy

Article Explains Risk Of Hiding Assets In Bankruptcy

By Jonathan Alper

Two people told me about a St. Peterburg Times article about people who get in trouble and lose their bankruptcy discharge because they tried to hide assets in a Chapter 7 bankruptcy. The author, Susan Taylor Martin, tells the story of bankruptcy debtor Gary K Parker who filed a bankruptcy petition listing few assets. Parker pleaded guilty to criminal act of failing to disclose an account with $35,000. The article states that many, if not most, bankruptcy debtors intentionally undervalue non-exempt assets or fail to disclose very valuable assets such as boats and gold watches. Such bankruptcy law violations are often  uncovered, according by to the article, when angry former employees or spouses contact the bankruptcy trustee.

My own experience is that most clients are very honest; they feel badly about having to file bankruptcy and do not want to cheat the system. There are also some clients who I suspect may be less than fully truthful in completing a bankruptcy questionnaire. Sometimes, after a bankruptcy attorney tells a client they have non-exempt assets the client will go to a second bankruptcy attorney and not disclose the same assets.

The newspaper article suggests that the bankruptcy system should, and is, becoming more aggressive in finding fraud. The article explains what many bankruptcy debtors do not understand to be the risk about lying on a bankruptcy petition.

Full post as published by Florida Bankruptcy Law on March 11, 2011 (boomark / email).