Hiding assets duringbankruptcyis an easy way to end up behind bars. Anyone considering hiding assets should look up a recent example of Joe and Teresa Guidice, who received prison sentences for concealing assets and engaging in fraud before and during their bankruptcy filing. The reality of the matter is that bankruptcy is a means of ridding yourself of debt legally and legitimately.
How Do People Hide Assets?
One common method is the hiding of assets by giving or selling them to friends or family. This is illegal. Courts and lawyers are aware of this practice as it seems like it may be a clever way to bypass the law, because you will no longer be in possession of the assets you’ve given away. However, this willful giving away of assets to friends or family to avoid potentially losing assets to a creditor is considered a fraudulent transactions requiring reimbursem*nt. The bankruptcy trustee can also sue your friends and family to regain the assets or money.
Other ways people hide assets is by lying about the possession of or destroying assets. Moving assets to other bank accounts or property or falsifying information to make it seem like the assets are of little or no value.
Additionally, people have been known to ask their lawyers how to hide assets. Any lawyer who agrees to hide assets does not understand their profession and will not be long in practice, and could end up in hot water along with the client.
Lastly, failing to list an asset can sometimes get you in trouble for hiding it. This sometimes occurs accidentally; therefore, it is important to know all of your assets. If you make an honest mistake by forgetting an asset, you must act immediately and report the asset you forgot.
How Do Courts Find Hidden Assets?
- An ex parte (one-sided, meaning you would not know about it) order could be granted to search for hidden assets.
- The transactions when assets are moved from a person to another are generally very easy to track. As most transactions are digital and recorded, it is clear when and how much of something was moved out of the account.
- Hidden assets can be found by reviewing such things as your debts, tax returns, payrolls, bank records, from the reports of other people who know you and from other methods.
What Happens If You Are Caught Hiding Assets?
- The disclosing of all assets is mandatory; therefore, you could be punished for a premeditated criminal act if you attempt to hide your assets.
- The result for hiding assets is also a denial ofthe discharge of your debts. Joe and Teresa Guidice was denied a discharge of over $13 million, most of which may have qualified for discharge, had they been open and honest throughout the proceeding. They will now remain legally liable for those debts.
- It will be noted on your criminal record and your credit report.
- It is a violation of Federal Law. You could be looking at sentences and fines around 5 years in prison and a $250,000 fine.
- Reimbursem*nt of gifted assets.
- Serious repercussion can occur for hiding even the most minor assets.
Honesty Is The Best Policy in Bankruptcy and All Court Proceedings
If you are afraid of losing assets to a creditor during bankruptcy, then you shouldpick an experienced lawyerwho understands the ins and outs of bankruptcy and who has been practicing in this area for a number of years. If you want to get the most out of your debt situation,contact a Washington DC bankruptcy attorneyto learn about your options for Chapter 7 or Chapter 13.
As an expert in bankruptcy law and financial matters, I can attest to the critical importance of transparency and honesty in the bankruptcy process. The example of Joe and Teresa Guidice serves as a stark reminder of the severe consequences that individuals may face if they attempt to hide assets during bankruptcy proceedings.
In the realm of bankruptcy, there are several concepts and practices at play that individuals should be aware of to navigate the process successfully and legally. Let's delve into these concepts mentioned in the article:
Hiding Assets During Bankruptcy:
1. Illegality of Transferring Assets:
- The article emphasizes that giving or selling assets to friends or family to avoid creditors is illegal and considered a fraudulent transaction.
2. Methods of Asset Concealment:
- Individuals may resort to lying about, destroying, or moving assets to other accounts or properties to create a false impression of their value.
3. Legal Consequences for Lawyers:
- Seeking advice from lawyers on how to hide assets is discouraged. Any lawyer who agrees to such practices is not acting ethically and could face professional consequences.
4. Accidental Omissions:
- Failing to list an asset, even unintentionally, is highlighted as a potential pitfall. The importance of promptly reporting any oversight is emphasized.
How Courts Find Hidden Assets:
1. Ex Parte Orders:
- The article mentions the possibility of courts issuing one-sided (ex parte) orders to search for hidden assets, emphasizing the seriousness with which the legal system views asset concealment.
2. Digital Transaction Tracking:
- Given the digital nature of most transactions, courts can easily track the movement of assets, making it difficult for individuals to hide their financial maneuvers.
3. Data Sources for Asset Discovery:
- Courts employ a variety of sources, including debts, tax returns, payrolls, and bank records, to uncover hidden assets. Information from acquaintances may also be used in the investigative process.
Consequences of Hiding Assets:
1. Mandatory Asset Disclosure:
- The article stresses the mandatory nature of disclosing all assets during bankruptcy proceedings.
2. Denial of Debt Discharge:
- Individuals caught hiding assets risk a denial of the discharge of their debts, as illustrated by the case of Joe and Teresa Guidice.
3. Legal Ramifications:
- Hiding assets is a violation of federal law, potentially leading to prison sentences, fines up to $250,000, and a permanent mark on one's criminal record.
4. Reimbursem*nt of Gifted Assets:
- The bankruptcy trustee has the authority to sue friends and family who received gifted assets to reclaim the assets or money.
Expert Advice:
1. Importance of Experienced Legal Representation:
- The article advises individuals to choose an experienced lawyer well-versed in bankruptcy law to navigate the complexities of Chapter 7 or Chapter 13 proceedings.
2. Honesty in Bankruptcy Proceedings:
- Emphasizes that honesty is the best policy in bankruptcy and all court proceedings, underscoring the potential serious repercussions for attempting to conceal even minor assets.
In conclusion, the key takeaway is that bankruptcy is a legal process designed to provide relief to individuals burdened by debt. However, attempting to hide assets not only jeopardizes the legitimacy of the bankruptcy process but can lead to severe legal consequences, including imprisonment and financial penalties. Honesty and transparency are foundational principles for a successful bankruptcy resolution.
