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Sibling falsely claiming assets in bankruptcy

My sister is filing for bankruptcy. Among her assets, she is claiming a business my mother owns. She managed my mothers business, and after money was missing (50k+), she claimed it as her own business( a hair salon). She never invested a dime into this business. She made legal claims to it, over the last 12 months, in the end, she signed off on a court document claiming no ownership before or after. Now, she has this listed as an asset! How can my mother have this removed from my sister petition? Mind you, she has already cost my family thousands in legal fees over this, and my mother is a senior on a fixed income. If this business was in litigation, and the case later dropped, wouldn't a court document stating be enough to show at the creditors meeting, to have it removed? And, what is the punishment for lying on a asset document? Any thoughts?

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Submitted Thu, 05/15/2014 - 13:53

This is easy to accomplish with a small amount of help from a bankruptcy lawyer. Or you could simply attempt to do it yourself, by the process would most likely take longer. If it were me I would look up on pacer, which is electronic filing system for the bankruptcy courts, and look up your sister's name and find her bankruptcy case. At that point I would find who the trustee in her bankruptcy case was in contact that trustee directly. Don't bother with the core because it's not their job to verify any of this information, it is the US bankruptcy trustee who is handling the case responsibility to look into these matters. I would provide them with legal documentation of the business such as an LLC, Corporation or some people actually have businesses as solo proprietors. With that documentation that should confirm to the US bankruptcy trustee that the business is not an asset of your sisters, and the bankruptcy trustee will take it from there. This may not even need to be done because if the business is established as an LLC or Corporation, the US bankruptcy trustee will find this information out. I know this is a little off topic but I know many here salons do not go through the trouble of filing as an LLC, all this can do for you is destroy your life once you have one client who file the claim on you and you will be personally liable for whatever happened to that client, could be simply slipping and falling while walking into your place and you lose everything you've ever worked for because of that situation. I know it's off-topic but I've seen too many people lose everything they own simply because they wouldn't spend a little bit of money and protect their assets.

I have responded to your inquiry according to the laws of Massachusetts, where my firm is located. Laws can vary significantly from state to state and cases tend to be rather fact-specific, so you are best served by consulting with a knowledgeable attorney in weighing your options.
Email messages/Online Correspondence are akin to conversations and do not reflect the level of analysis applied to formal legal opinions. Email/Online responses do not form an attorney-client relationship.

Joseph F. Botelho, Esq.

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