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Concealing assets during bankruptcy is a bad idea

For some Tennesseans, making the decision to file for Chapter 7 bankruptcy is hard. For others, the call is easy to make. Whichever camp a person falls in, the next step is to prepare. And that begins with identifying assets so they can be listed in the bankruptcy filing. But, some people play fast and loose with this step; some people leave assets off their filing. What are the consequences of doing so?

Failing to list assets is a no-no. It can invalidate the bankruptcy. It can also lead to federal criminal charges under a bevy of possible offenses ranging from concealing property to filing false bankruptcy schedules to providing false testimony and on and on. The bankruptcy code, in short, makes virtually every form of concealment a criminal offense whether from passively omitting details to actively suppressing them.

What kind of assets do people leave off? Every kind, but some are more popular than others. For instance, some people try to exclude out-of-state investment property like a condo. Or, they overlook bank accounts that are for their benefit but not in their name. Or, they may fail to include an ongoing personal-injury case.

What is the risk of getting caught? It depends, but the odds are increasing. The U.S. Attorneys' Office has begun to prioritize these types of infractions. One way they have done so is by creating a bankruptcy fraud working group in which the FBI, the U.S Attorneys' Office and the Inspector General of the Post Office collaborate to crack down on these crimes.

To minimize these risks, Tennesseans considering bankruptcy may benefit from discussing their situation with an experienced bankruptcy attorney.

Source: FindLaw, "Criminal Consequences Of Concealing Assets in Bankruptcy," Accessed Nov. 8, 2016

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Mark T. Young & Associates
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Hixson, TN 37343

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