When you file for bankruptcy, you are required to disclose all of your assets. Omission of even relatively minor assets can be used as grounds for denying your bankruptcy petition based on a false oath and may result in your discharge being refused.
Can I Pay Friends And Family?
Some people try to hide assets by giving money or property to friends or family before filing for bankruptcy. This way their assets are technically not in their possession when they file for bankruptcy.
However, courts are aware of this practice, and paying friends and family prior to filing for bankruptcy may be construed as fraudulently transferring assets or as preferential payment. The Court can demand that these payments to family or friends be reimbursed. The Trustee (the person appointed by the court overseeing the bankruptcy) can go after payments made up to 365 days prior to you filing for bankruptcy.
What Is My Liability if I Hide Assets?
If the court determines that you have hidden assets, your discharge will be denied. This means that your entire bankruptcy petition will be thrown out, and you will be liable for all your debts.
Under the new bankruptcy laws, the Trustee still administers your assets and your non exempt property will be used to pay creditors. After all non exempt property is liquidated, you are still liable for claims made by creditors who are not paid. These creditors can use state law remedies to collect unpaid claims.
How Long Would I Have To Wait Before Refiling If My Bankruptcy Case is Dismissed?
If it is discovered that you hide assets on your bankruptcy petition and your petition was subsequently dismissed, you will have to wait before you can refile. Generally, you cannot be discharged of debt under Chapter 7 if you received a Chapter 7 or Chapter 11 discharge within the six years before the filing of this petition or if you received a Chapter 12 or Chapter 13 discharge in a case that paid less than 70% to the unsecured creditors and was filed in the six years before the filing of this petition. These restrictions do not apply to a previous Chapter 13 bankruptcy.
What Should I Do If I Acquire Property After Filing Bankruptcy?
If you acquire property after you file for bankruptcy, you should disclose this to the bankruptcy court. A supplemental asset schedule should be filed in cases under Chapters 7,11, 12 or 13 showing any property acquired after filing bankruptcy. The supplemental schedule should be filed within 10 days of you knowing that you will be acquiring the property. Extensions may be given by the court.
You have a continuing duty to submit supplemental schedules whenever you gain additional property. However, most property you acquire after filing for bankruptcy will not become part of your bankruptcy estate, so you will be able to keep it. Generally, you are required to inform the Trustee of any assets you acquire within 180 days after you file for bankruptcy, even if your debt has been discharged before this 180 day period.
Do I Need A Bankruptcy Attorney?
If you are contemplating filing for bankruptcy, it is very important to understand the best ways to protect your assets without fraudulently transferring assets or hiding assets. Laws concerning what actions are allowed to protect assets vary by state. An experienced bankruptcy attorney can determine when is best to file for bankruptcy and how best to protect your assets.