Hiding assets in bankruptcy is really a bad idea. But people often try to hide assets while filing the petition. Better you contact a bankruptcy lawyer before doing anything nonsense. According to the law, when filing a bankruptcy petition, the applicant is obliged to provide full information about the assets he has. In some cases, the assets are seized in order to pay off the overdue obligations. However, there are some types of assets that are exempted from seizures as they are a means of basic necessity for human life. And only an experienced bankruptcy lawyer can help you in this case.
However, in the event that the applicant has no assets and is not able to repay the debt to creditors, the court may accept a bankruptcy petition, which does not imply repayment of the existing debt to creditors. In such cases debt has been legally removed from the applicant.
However, some people try to do everything possible to conceal their property by transferring it to their relatives or by providing false documents about their property. But hiding assets in bankruptcy will only lead to the cancelation of the application.
What are the exempted assets?
Many people, not knowing the law, hide their exempted assets. Exempted assets are understood to mean property that, regardless of existing debts, is not seized from the debtor. It is so because these assets are a means of primary necessity for human life. In this regard, there is no need to hide such property.
Exempted assets include:
- Vehicles up to a certain value
- Public benefits
- Personal rewards
- Unpaid wages
- Clothing and household items
- Jewelry up to a certain value
What are non-exempt assets?
There are such assets which, in any case, cannot be exempted. But it is found that many applicants try to hide non-exempt property, due to the fact that it can be withdrawn to pay off debts.
- Second vehicle
- Country houses
- Bank accounts
- Stocks and bonds
- Valuable collections
- Valuable musical instruments
- Part of equity
- Retirement benefits
- Lottery wins
- Own assets
- Rewards from other claims
Why hiding assets in bankruptcy is a bad idea?
When filing a bankruptcy petition, the applicant is assigned a trustee whose duties include a thorough examination of the case, as well as obtaining information about the applicant’s assets. The trustee has the right to request information on tax returns, bank accounts, family wills, and other documents on the basis of which he can receive information about the applicant’s assets.
If the trustee has received evidence that the applicant has unintentionally hidden part of his assets, then often this does not bear any serious consequences, but only delays the process of declaring bankruptcy.
However, if the trustee has irrefutable evidence that the applicant intentionally concealed part of his assets, then, in this case, the bankruptcy application will be rejected, and the applicant will also be deprived of the right to file the application for a certain amount of time.
If the trustee has evidence that the assets were transferred to another person before filing the application, the bankruptcy petition will also be rejected. In any case, hiding assets in bankruptcy is a bad idea. Since in such cases, lenders have every right to collect debts through the court.
Is it possible to avoid liability in bankruptcy?
Do not try to avoid liability. As a matter of fact, even respectable CEOs and founders of a business may be suspected of fictitious, deliberate bankruptcy, as well as committing unlawful actions in bankruptcy. The following tips will help reduce the risk of an adverse outcome:
- Keep all documentation affecting your business, including contracts.
- Do not make doubtful transactions with counterparties (for example, to alienate assets at too low a price).
- Develop an internal document governing the approval of transactions.
- List all assets owned by you or the company.
The best solution, if you want to save the maximum amount of assets, is to turn to an experienced bankruptcy lawyer.