When you file a bankruptcy you must tell your attorney about all of your assets and debts. In fact, several of the documents that you sign when filing a bankruptcy advise that your bankruptcy can be dismissed without a discharge, you can be fined up to $500,000.00 or imprisoned for up to 5 years for intentionally making false statements or concealing property from the bankruptcy court.
The Monroe, Louisiana newspaper, The News Star recently reported on the conviction of a Monroe woman, Harriett King, for multiple counts of bankruptcy fraud, including misrepresenting herself to individuals as a bankruptcy lawyer, and also for failing to disclose assets in her personal bankruptcy filing.
King owned a business known as HL King and Associates Inc. and claimed to provide legal services.
Testimony in Ms. King’s trial established that Ms. King, a bankruptcy petition preparer, receive legal fees and court costs on at least three occasions from debtors by representing to the debtors that she was an attorney.
The bankruptcy code does permit a debtor to use the services of a bankruptcy preparer, but a bankruptcy preparer cannot give legal advice. In other words, a bankruptcy preparer must take the information provided by the debtor and prepare the bankruptcy documents, not advise the debtor on what to put in the documents.
Further, when Ms. King filed her own personal bankruptcy petition, it was found that she fraudulently claimed to own property she did not own and omitted debts she was required to disclose.
Besides the obvious risk of fines and jail time, there are various exemptions available that allow debtors in both Chapter 7 and Chapter 13 bankruptcy to keep most or all of their assets when they file for bankruptcy.
Additionally, even if the property is not exempt, it might not have actual value to the court and you can keep it anyway.
Finally, if a debtor wants to keep a non-exempt asset, a trustee in bankruptcy will frequently agree to accept cash payments for the asset, or a debtor may be able to keep the non-exempt property by filing a Chapter 13 bankruptcy.
by Kevin Gipson, New Orleans, Louisiana bankruptcy lawyer.