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Lying on bankruptcy petition

I'm thinking about filing bankruptcy but my situation is so bad that I'm worried about not be able to recover even after the debts are discharged. I don't want to go into details but I have one asset that I could hide pretty easily and not disclose and then sell it later after the bankruptcy. I know you can't tell me if I should do this but what are the chances that I will get caught?

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I've just consulted my crystal ball and the answer is . . . .   Come on.  You can read this post about fraud and hiding assets in bankruptcy, but the bottom line is (as you already know) that lying on your bankruptcy petition is a horrible idea.  Bankruptcy trustees have seen it all, and they are very good and sniffing out fraud.  You can assume that whatever it is you are thinking about doing, it's been done before. 

The irony of this situation is that sometimes people risk jail and fines to hide assets that they could have sheltered using exemptions that are allowed under federal and Massachusetts law.  A much better idea is to discuss your situation with an experienced bankruptcy attorney and talk to her about strategies for dealing with your debt while holding on to your remaining assets.  Good luck

Submitted Wed, 04/30/2014 - 19:06

I have this situation all the time with clients, with them asking how to hide assets in a bankruptcy petition. The one you are absolutely correct as an attorney I cannot advise you on how to do that. But I will give you a little idea on how difficult it actually is and how dangerous it will be. If you've ever owned anything in its ever been in any type of electronic registering system it takes me about 10 seconds of typing and then another second to press enter and I know everything about your life and everything you've ever done, the bankruptcy trustee has the same access to the exact same software. So the chances of you get in caught are not slim to none, they are actually substantial. It is never happened to me in my practice, but attending enough 341 meetings I have seen it happen time and time again, it looks very bad for your attorney and what you're looking at is jail time. This is not a playground, this is bankruptcy court. Bankruptcy court is run by the department of justice, not some state organization. So when you go to jail you don't go in the local jail down the street, you go to a federal prison, filled with federal inmates. If you have assets that you do not want to lose, you may consider a chapter 13 bankruptcy as opposed to going to federal prison.

Joseph F. Botelho, Esq.

Attorneys At Law

Submitted Thu, 05/01/2014 - 07:42

Your Question assumes too much. How do you know you will lose the asset? Before you take the risk of concealing an asset in bankruptcy, you need to ask whether concealment would help you. There may be no advantage to concealment! The State of Massachusetts offers exemptions that cover thousands of dollars worth of property, sometimes tens or hundreds of thousands or more. There are also Federal exemptions. For an asset that can be covered by these exemptions, there is no point trying to hide it. The first thing you need to tell an attorney is what the asset is and how much it is worth. There is no reason to assume you lose it until you have done that. I understand why you did not want to post those details here, but you need to have this conversation with an attorney. If the asset was subject to sale in the bankruptcy, then you can develop a strategy about what to do. Concealment is the riskiest thing you could try; no attorney you can trust would recommend it. Better options include filing a Chapter 13 or doing pre-bankruptcy exemptions planning.

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