When Filing Bankruptcy What Happens if You Lie to the Trustee?

Filing for bankruptcy can be one of the most stressful things that anyone has to go through in life. Often times, it comes with depression and a host of other problems that are unrelated to monetary issues. A bankruptcy can create a perfect storm of stressful situations. There is no doubt, that under these circumstances, it can seem like the best thing to do is to keep and hide whatever cash and assets you can when you file for bankruptcy. It is very important to understand the ramifications about lying to a trustee when filing for bankruptcy.

There are various methods that people employ to protect their assets while still filing for bankruptcy. Many people will often give cash, property, cars and other items to family members or friends in an attempt to hide them. The reasoning behind this is that most people do not want to lose absolutely everything and feel that by withholding certain things and claiming that they have no money or any assets that they can get back on their feet faster. This is flat-out lying and the truth of the matter is that you really can’t hide stuff most of the time. If there is a good deal of money involved, you better bet that they are going to find it. Despite whether the money was given to friends or family members, the trustee is going to do whatever they can to take that money back.

The problems don’t stop there. There are certain instances where a person may have a failing business, or have gone into the tank with creditors but still have various assets. In instances like this, many times individuals will try to sell off what they can for cash and accumulate as much as they can in physical items before filing for bankruptcy. The theory behind this is that they have stacked up a ton of debt on paper, probably enough that they feel there is no way that they are going to be able to get out of it, no matter how much cash they have on hand. In circumstances like this, the individual tries to accumulate physical wealth and put it away somewhere and then proceed to file for bankruptcy. If this person were to, for instance, dig a hole in the backyard and bury the money so that they have it at a later date, this creates a whole new problem for that person.

When you purposely hide money and assets of that nature, you can be facing jail time as well and it all starts to stack up depending on how much money you tried to hide. The thing that most people do not realize when they are dealing with filing for bankruptcy and also dealing with a trustee that is trying to recoup funds, is that this is not a new game for a trustee. They deal with things of this nature on a daily basis, this is what they are in the business for. The job of the trustee is to do everything in their power to recoup funds when a person or business defaults. This is why you should never lie to a trustee when you are filing for bankruptcy and should always report all funds that you have and have had in the past.

When filing for bankruptcy, do not lie to the Trustee, do not hesitate to contact a lawyer for representation, and do some in-depth research on filing for bankruptcy.