Bankruptcy can be a wonderful way to get rid of debts you have, but it can also cause you to lose some of your assets. Surrendering assets is the part most people do not like; however, bankruptcy is give and take, and anyone who files should expect this to happen. If you think that you can give dishonest information when you file, simply to avoid losing your assets, you should think again. Filing for bankruptcy requires full disclosure, and you could suffer consequences if you fail to tell the entire truth. Here are two consequences you face if you get caught doing this.
You Will Forfeit A Discharge
If you own property that is worth money, the bankruptcy trustee may have the right to seize the property. The trustee does this to raise money, and will accomplish this goal by selling the asset. The money is used to repay your creditors. If you do not want to lose your assets, you may be tempted to lie about them. You may act like you do not own any assets, simply to avoid having them seized.
If you are caught doing this during bankruptcy, the trustee may come down hard on you. He or she could either dismiss the entire bankruptcy case, or the trustee might keep the case going without giving you a discharge of your debts. In this case, you would still be responsible for paying your debts, but you could potentially lose the asset you were trying to hide.
When bankruptcy fraud is discovered, the trustee may also have the right to seize other assets you own. This can include assets you were planning on keeping, such as your house or car. You stand to lose a lot more if you lie on your bankruptcy documents than if you had told the truth from the beginning.
When a bankruptcy case is dismissed, it means it is closed. If you want to file again, you will probably have to wait for at least 180 days before you can do this. In some cases, the bankruptcy court will permanently take a person's rights away for filing bankruptcy if fraud is unveiled. If this happens, you will never again be able to file.
You May End Up With Criminal Charges
Bankruptcy fraud is a serious crime, and it can involve:
- Lying about assets
- Giving assets away before filing
- Racking up large amounts of debt right before you file
- Hiding income
When you file for bankruptcy, you must sign a petition that states you are telling the entire truth. In other words, if you lie on these forms you are committing perjury. Perjury is a criminal offense, which can lead to consequences. Anyone that commits bankruptcy fraud could end up with large fines to pay, which might be as high as $250,000. Another consequence of bankruptcy fraud is up to five years of prison time.
Avoiding these consequences is not hard to do, but it requires complete honesty. You should realize that filing for bankruptcy is not your right; it is actually a privilege. You are free to use bankruptcy if it is legitimately necessary for your situation, but you lose this privilege if you decide to lie on your forms. If you are tempted to do this, keep these consequences in mind.
Bankruptcy can be a good solution for people that have a lot of debt they cannot repay, but it also comes with consequences. It's always important to discuss your case thoroughly with a bankruptcy attorney before going through with it. To learn more, make an appointment with a bankruptcy lawyer today.