Bankruptcy Fraud - Just How Much Trouble Can You Get In By Lying?

The following is a common situation that needs to be addressed. Often, people will come into my office to talk about bankruptcy and discuss their options. During the course of our conversation, we talk about their assets. Sometimes, I unfortunately have to tell people that they may lose property if they file a Chapter 7 bankruptcy, or pay money to the trustee. Although many people understand this, others get upset. They may talk about transferring property or just not disclosing it on their petition. Of course, I have to advise them that I will not file their petition if I know that we have not disclosed all of their assets or transfers. I often wonder how many of those people then go to visit another attorney and do not tell them about their assets. If you're thinking about hiding assets during your bankruptcy, you need to think twice.

First things first. BANKRUPTCY FRAUD IS A CRIME. According to some sources, nearly 70% of all bankruptcy fraud involves the concealment of assets. You need to know that when you sign your bankruptcy petition, you are signing it under penalty of perjury.

Under federal law "A person who - (3) knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11 (The Bankruptcy Code) shall be fined under this title, imprisoned not more than 5 years, or both." 18 USC 152. The maximum fine is $250,000. This should impress upon you the consequences of intentionally lying on your bankruptcy petition or attempting to conceal assets.

Furthermore, when you sign your petition, it states that "I declare under penalty of perjury that the information provided in this petition is true and correct". Also, when you attend the Meeting of Creditors, your bankruptcy trustee will swear you in. The point is that this is serious stuff people.

Other consequences of lying during your bankruptcy could include: having your discharge denied or revoked. You may also be forced to surrender property to your bankruptcy trustee.

Finally, you need to know that going back and fixing your schedules or disclosing assets does not relieve you of liability for lying in the first place.

If you're concerned about losing property through a bankruptcy, talk to an experienced bankruptcy attorney about the possibility of filing a Chapter 13 bankruptcy. In a Chapter 13, you can keep all of your property, although you will pay the value of your non-exempt property through your Chapter 13 case.

For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.