Secret bank account

[sassiebaz]

Long story, too much for this forum, but I think my spouse may have a secret bank account. You think the trustee will find out? I cannot seem to find any trace of it, but something transpired that lead me to believe one exists....

[optimistic1]

I would explain it to him like this.

Question: So what is worst thing that can happen in a bankruptcy case if you aren’t honest?

Answer: You can go to prison.

Always be truthful and forthright in a bankruptcy proceeding as lying or misleading the Bankruptcy Court, Trustee, and your creditors has serious consequences. While going to prison in relation to a bankruptcy case usually never happens, it is possible. Most debtors who make honest mistakes can often overcome them by a reasonable explanation or amendment to the satisfaction of the Bankruptcy Trustee. The bankruptcy system probably isn’t looking to prosecute a debtor who may have forgotten to list their family pet on the bankruptcy schedules as an asset. However, they are looking for instances where an individual or corporate debtor may be attempting to “abuse” the bankruptcy system by intentionally hiding assets, misstating the value of assets, misleading creditors, or illegally transferring property prior to filing for bankruptcy. These kinds of actions can result in being charged with bankruptcy fraud.

Bankruptcy fraud is nothing to take lightly, especially when there is the potential for prison time. In the United States, bankruptcy fraud and other bankruptcy related crimes are Federal Crimes since the Bankruptcy Code, and all bankruptcy proceedings, are controlled by Federal law. The Bankruptcy Code is found under Title 11 of the United States Code and the criminal part the United States Code relating to Bankruptcy Crimes is found in Title 18 of the United States Code sections 151 through 158.

Bankruptcy fraud includes filing a bankruptcy petition or any other document in a bankruptcy case such as the bankruptcy schedules, or statement of financials affairs, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud also includes making a false or fraudulent representation, false claims or promises in connection with a bankruptcy proceeding, before or after the filing of the bankruptcy case, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud is a crime punishable by a fine, or up to five years in prison, or both.

If a debtor or anyone else, knowingly and fraudulently conceals property of the estate from a receiver, custodian, trustee, marshal, or other court officer it can be a separate offense, and may also be punishable by a fine, or by up to five years in prison, or both. The same penalty may be imposed for knowingly and fraudulently concealing, destroying, mutilating, falsifying, or making a false entry in any books, documents, records, papers, or other recorded information relating to the property or financial affairs of the debtor after a bankruptcy case has been filed.

Certain offenses regarding fraud in connection with a bankruptcy case may also be prosecuted in a Texas State criminal court depending on the facts and involvement of the parties in the case. Texas criminal prosecutions arising out of a bankruptcy case can include charges of theft of either goods or services that may have been obtained by the debtor for which payment, either in whole or in part, was evaded by the fraudulent bankruptcy filing.

While filing for bankruptcy can sometimes be the most responsible way to obtain debt relief and start over, it is very important to be completely honest about your situation no matter what your situation is. Lying, attempting to conceal assets or anything short of total disclosure could result in a revocation of your bankruptcy discharge, criminal charges, or in some cases prison.

[walkthaplank]

Long story, too much for this forum, but I think my spouse may have a secret bank account. You think the trustee will find out? I cannot seem to find any trace of it, but something transpired that lead me to believe one exists....

My wife and I had a discussion before we decided to do this. This had a larger impact on our relationship in general. What I said going into this that we have decided that we need to do what we can to keep our relationship, to make our relationship healthier, to make our relationship stronger. Basically it was "what has passed is past and we need to move on from here". Essentially, we both acknowledged that getting IN to this situation we had been less than honest with each other, that now was cards on the table time where we came clean and had a general amnesty (so to speak). We agreed to those terms and that we would not use this again in the future to beat each other up, that we would learn to trust each other and focus on getting our house in order.

You are in a situation where having a secret account can cause a real problem for you guys. Like the others have said, at best you will have a really difficult BK experience, at worst you could be convicted criminals. You need to have a real heart to heart, come to Jesus (whatever you want to call it) discussion where you need to realize that you are in a bad spot, dishonesty and disharmony will only make it worse.

Now is the time to come clean and you need to know going in to this conversation how you are going to respond to any confession he may have to share. I know with my spouse there is nothing that would be a "deal breaker". I knew going into the conversation that I might be angry, hurt, you name it, but I knew that my long term goal was more important than short term discomfort.

So get a definitive answer on all accounts, point out to him that the trustee WILL find it if it exists and if there is anything, you need to let your lawyer know ASAP so he can amend your petition.

Best of luck.

[falken]

If your spouse does not admit to the secret bank account, and you believe he may still have one, you really need to each submit your own bankrupcy petition.

Have your lawyer notate that your petition contains your financial affairs as you believe them to be. This offers you more protection if assets are later discovered that you had no knowledge of. I can almost guarentee that both of your cases will get more attention from the trustee however, as it almost screams that something may be inaccurate.

[bksmith12345]

OK, mister hypothetical here. What are the answers to these scenarios.

1. Spouse has open savings accounts for the kids. Very small balances. Say under $100. Not disclosed to trustee. A family member knowing of the BK and financial stress gives them say $5000 cash and then it is deposited in those accounts. Can the trustee find out? What would happen if they did?

2. Spouse has a secret checking account. Balance very small say $10. What if they did some side work for cash and deposited $5000 into it. Can the trustee find out? What would happen if they did?

3. Spouse has a secret checking account very small balance. Or, our regular checking account with it's regular balance. One or both of us goes to a casino and wins $10000 at blackjack. Yeah right. One or both of us deposits it. Can the trustee find out? What would happen if they did?

I always wondered what would happen if someone came into some money during a 13. Everything I read says it goes right to the trustee. And since the change in BK laws there is no early buyout unless you pay the unsecureds 100%. My attorney says different. So far he has been right about everything he has said. It is all very curious. What the heck happens if you win the Mega Millions Lotto? Well, I guess at that point it really dosn't matter!

Any opinions?

[detroit9]

Not sure about all of your questions but if you win money over a certain amount you will have to report it on your trax returns and then it will get picked up by your Trustee, assuming he asks for it. He asked for ours this year and I assume he will in the future. Along with that of course is the fact that the winnings will be reported to the Govt, so you can't hide it from your filing.

Other forms of money showing up I think would be similar, if its reportable as income they can find out.

[falken]

OK, mister hypothetical here. What are the answers to these scenarios.

1. Spouse has open savings accounts for the kids. Very small balances. Say under $100. Not disclosed to trustee. A family member knowing of the BK and financial stress gives them say $5000 cash and then it is deposited in those accounts. Can the trustee find out? What would happen if they did?

2. Spouse has a secret checking account. Balance very small say $10. What if they did some side work for cash and deposited $5000 into it. Can the trustee find out? What would happen if they did?

3. Spouse has a secret checking account very small balance. Or, our regular checking account with it's regular balance. One or both of us goes to a casino and wins $10000 at blackjack. Yeah right. One or both of us deposits it. Can the trustee find out? What would happen if they did?

I always wondered what would happen if someone came into some money during a 13. Everything I read says it goes right to the trustee. And since the change in BK laws there is no early buyout unless you pay the unsecureds 100%. My attorney says different. So far he has been right about everything he has said. It is all very curious. What the heck happens if you win the Mega Millions Lotto? Well, I guess at that point it really dosn't matter!

Any opinions?

1) Can the trustee find out? Yes. Chances are much greater of the trustee finding it if it was/is open before or soon after you file. Your case could be dismissed, fraud charges could be filed.

2) Same basic rules apply to this one, except it may also be refered to the IRS if you did not report it on your taxes.

3) If any of your debt was because of gambling I can assure you that your case will be dismissed. Either way, it really begs the question of where your disposable income to go to the casino to start with was comming from?

In the end, no one can answer if the trustee is going to find out or not. The answer to every question is a big maybe. If I told you there was only a 10% chance they would find out, does that make it worth it?

As far as early buyout, that is also a maybe. I know of at least two districts that allow for early buyout with less than 100% payback. The trustee and judges in these districts interpret the new laws different than most and allow for early pay off. The reasoning is sound, and so far no one has challenged them. However, they want you to have worked for the money. If you inherit it or win it, that will be taken as extra money to go to your creditors.

[bksmith12345]

Hey All,

Thanks for the replies. As I said my scenarios are all hypothetical. We don't gamble and no family members are offering any money.

I always wondered what would happen if you got some cash and deposited in a checking account. Again, if you won $10000 at a casino playing blackjack when you cashed out they don't look for tax money they just cash out your chips. At least they did the last time I went to a casino 6 years ago. Or, if you had assets say gold coins from a relative you sold for $10000 to a coin dealer or whoever no one would know. The thing is to keep it all cash. A problem we don't have.

The OP's topic really intrigued me because our attorney says a buyout in a 13 is possible without paying the unsecureds 100%. My interest in this topic, I guess, is really about an early buyout and how you can actually do it if the trustee wants any extra money.

Am I making sense? Would love any replies.

[falken]

The OP's topic really intrigued me because our attorney says a buyout in a 13 is possible without paying the unsecureds 100%. My interest in this topic, I guess, is really about an early buyout and how you can actually do it if the trustee wants any extra money.

Am I making sense? Would love any replies.

If you are in one of the few districts allowing the CH13 buyout, then your trustee feels that you can work extra hard to make more money and pay off your plan early.

The theroy is that if you knew they were going to take any extra money you made you would not have worked extra hard to make it, so its not really extra disposable income because the money would never have been made if they were going to take it from you.

If you win the lottery the trustee is going to take it give your unsecured creditors extra (up to 100%). If you take on overtime, get a promotion, or take on a second job, they will let you use that money to pay down your ch13. Once agian, this only applies in areas where your lawyer has informed you that early payoff with less than 100% is allowed.

[bksmith12345]

Hi Falken,

My attorney has stated an early buyout is possible. We are are in NJ. I just didn't know how this could be. I thought extra income was the trustees.

If it is possible and we worked extra jobs could we save and pay in one full amount for the buyout? If so, does that mean we would be done and our lien stip as well?

The whole thing is very ambiguous at best.

Thanks so much.

[sassiebaz]

Ok, I found something that made me think he bought something online that I had no record of. I asked him if he had a bank account somewhere other than our CU and he said no. I told him that if the trustee found this information, we could get in big trouble. Again, he said he did not have any other bank account. When I went back to look at this "website" it looks like anyone can use it for free...then upgrade by making a purchase. Yeah, I know....looks like we have more than financial problems.....

[dingdong]

Maybe he used a visa gift card to use the website "services".

Not really a secret account, but not fun to find the hubby looking at those special "websites"( if I am getting your drift as to the content)

Put a Nanny blocker with Password protection on the PC. (hee, hee)

[sassiebaz]

Maybe he used a visa gift card to use the website "services".

Not really a secret account, but not fun to find the hubby looking at those special "websites"( if I am getting your drift as to the content)

Put a Nanny blocker with Password protection on the PC. (hee, hee)

Yeah, you think I can use a therapist bill as an exemption, looks like Im gonna need it!

[SCorpPain]

My first thought when I read the origional post was "How could someone keep a bank account from the trustee, when a SSN is required to open a bank account?"

It seems like attempting to hide a bank account would be automatically discovered. Correct?

[albacore44]

Come-on............give him a break. men are nasty, it's in our nature, deep down you woulden't have it any other way. and.......It will add a little spice to your relationship