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Don’t risk your bankruptcy discharge – list all your assets

by David Leibowitz, Illinois and Wisconsin Bankruptcy Attorney · Posted in *Bankruptcy Information, Discharge of Debt

If you file a bankruptcy case, you have to disclose all your assets.  You have to show your bank statements to the bankruptcy trustee.  You have to show your tax returns to the trustee too.  It’s not as easy as you think to hide assets. Nobody will believe that you don’t have a checking account.  Nobody will believe that you don’t have a savings account.  That’s particularly true if you make even a middle-class income.

Today, I saw a debtor get into a world of trouble.  He said, under oath, in his schedules that he had no bank account and no savings account.  But the trustee found out that the debtor did have bank accounts.  He got the bank records.  The debtor had over $8000 in the bank on the date he filed his bankruptcy petition.  He also had a big tax refund coming which he neglected to mention.

This is a huge problem.  What kind of bad things can happen to this debtor who was caught red handed lying to the trustee?

  • The debtor will have to come up with that $8,000
  • The debtor will have to give up his income tax refund
  • The trustee can make a criminal referral to the United States Trustee or the U. S. Attorney
  • The trustee can file a complaint to bar the debtor’s discharge in bankruptcy

Essentially, the debtor’s false statements under oath result in the worst of all possible worlds.  The debtor has a bankruptcy on his credit report for 10 years.  The debtor loses all of his non-exempt assets.  The debtor can’t get rid of the debts he had as of the date of his bankruptcy.  And the debtor faces the risk of criminal prosecution.

My advice?  Don’t let this happen to you.  Tell your bankruptcy lawyer everything.  Be honest.  Don’t hide assets.  Remember, in bankruptcy, an honest debtor can get a fresh start.  A dishonest debtor can have all kinds of books thrown at him.

Lakelaw represents honest debtors in bankruptcy cases in Illinois and Wisconsin.  Call us at 1 866 LAKELAW (525-3529).

About David Leibowitz, Illinois and Wisconsin Bankruptcy Attorney

David Leibowitz holds a B. A. in Economics from Northwestern University and received his J.D., cum laude, from Loyola University of Chicago School of Law where he also served as Note Editor of the law review. Admitted to the Illinois and Wisconsin bars, he is the managing member of Lakelaw, an interstate law firm with offices in Chicago, Skokie and Waukegan in Illinois and Kenosha, Wisconsin. He is nationally recognized for his work in identifying and pursuing mortgage related claims in the context of bankruptcy. David is a member of both the Illinois and Wisconsin bars and has practiced in bankruptcy courts throughout the country. He is a member of the American Bankruptcy Institute where he is the Co-Chair of the Commercial Fraud Committee. He is ta frequent contributor to the ABI Journal and speaker at ABI events. He is an author and editor in chief of the American Bankruptcy Institute Fraud Manual published in 2010. He is also a member and Director of the National Association of Bankruptcy Trustees, a member and frequent speaker for the National Association of Consumer Bankruptcy Attorneys and numerous state and local bar associations. He is Board Certified by the American Board of Certification in both Consumer Bankruptcy Law and Business Bankruptcy Law. David is also the publisher of Lakeblawg, www.lakelaw.com/lakeblawg, a blog dedicated to consumer and small business bankruptcy and mortgage foreclosure defense.

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