Giving Away Your Money Before Filing Bankruptcy and Lying on Your Paperwork May Land You In Jail
By Jill Michaux, Kansas Bankruptcy Attorney on Feb 23, 2008 in Bankruptcy Cases of Interest, Bankruptcy Practice and Procedure, Chapter 7 Bankruptcy, General Bankruptcy Information, Kansas
Giving away your money to your relatives before you file your bankruptcy case and lying on your bankruptcy paperwork may land you in federal prison, as this Wichita man learned out Friday.
A Kansas federal court jury found this former car dealer guilty of making a false statement and bankruptcy fraud. The man is awaiting sentencing and faces a potential maximum five years in prison plus a $250,000 fine on each count.
The evidence at trial showed the man gave money to his relatives before filing his bankruptcy case and falsely said he had no checking account on his bankruptcy paperwork. He also ran up his credit cards with cash advances, travel and jewelry purchases prior to filing.
This debtor’s bankruptcy discharge was denied, the chapter 7 bankruptcy case was dismissed, the debtor was investigated by the Federal Bureau of Investigation and was criminally prosecuted by the U.S. Trustee and the U.S. Attorney. It is hard to imagine a worse outcome from a bankruptcy filing.
Bankruptcy relief is for honest debtors to get a fresh start. You have to tell the truth and make full disclosures to the Court to get a bankruptcy discharge. Read more about this crucial bankruptcy requirement in these posts: Green Chair of Truth at the 341 Meeting by Karen Oakes, Technically Is a Word That Cause a Lot of Trouble in Bankruptcy by Susanne Robicsek, Tell the Truth, the Whole Truth and Nothing But the Truth by Steve Otto, and How Will The Judge Know If I Don’t Tell the Truth by yours truly.
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