The importance of disclosing ALL assets in Bankruptcy

[Kentucky-BK]

The vast majority of individuals filing for bankruptcy relief are honest and want to comply fully with the law in an effort to get a fresh start. One of the most important elements of filing a bankruptcy is to make sure that you list all assets on your bankruptcy petition. If an attorney is helping you file, make sure you disclose all assets, and review the petition closely prior to signing to make sure that all your assets are listed on the petition. Failure to list an asset is a crime. The below link leads to a story of a lady who is currently being indicted in federal court for failure to list all assets on her bankruptcy petition. The story is an example of how bad things can go if assets are not disclosed.

Link: http://www.rrstar.com/communities/x1092588354

[SUB]

The story is an example of how bad things can go if assets are not disclosed.

That story is about a blatant fraud. She appears to not have disclosed ANY assets.

[MajorMike]

Exactly! There are a ton of articles like this as well. Google, "BANKRUPTCY FRAUD". They say about 80 percent of BK fraud is because they didn't disclose their assets.
In a Chapter 7, it's even worse if you do this.

[Flamingo]

BK fraud is one of the major factors in getting the new law passed in October 2005. BK fraud was rampant prior to that time; things are much more strict now in an attempt to eliminate or bring down the percentage to a low point. Our attorney told us about one person who would continually file BK after BK, letting the required time pass in between each one and filing again. He actually used BK as a budgeting tool. You would think creditors would have someone like that on a massive radar target instead of continually granting credit!

[HHM]

BK fraud is one of the major factors in getting the new law passed in October 2005. BK fraud was rampant prior to that time; things are much more strict now in an attempt to eliminate or bring down the percentage to a low point. Our attorney told us about one person who would continually file BK after BK, letting the required time pass in between each one and filing again. He actually used BK as a budgeting tool. You would think creditors would have someone like that on a massive radar target instead of continually granting credit!

BK fraud was NOT rampant before the new law, that is just crap. Yes, some people abused the system (and still do), but to say BK fraud was rampant is just crap, and to punish the 95% of legitimate debtors because of the actions of just a few was misguided by congress. (democrats and republicans)

[FreshLikeADaisy]

I'm sorry, but that entire post just sounds like an ad to me, and pointless: everyone who has ever looked at the forms or spoken to an attorney knows good and damn well that assets are to be disclosed: no sermons necessary.

People who are going to lie are going to lie anyway; most people don't. Anyone who has read even a cursory number of posts on this board knows the general stress and worry level of the average filer, and the obvious sincere desire to do whatever is necessary (and surrender whatever is necessary!) to get their debts taken care of. The average filer -- at least on THIS board -- has been through hell and back already, and needs no finger wagging or pseudo-"legal" admonitions to be honest in their schedules. It's hard enough just being accurate, never mind trying to craft a slick lie about what is owned and where it might be hidden. For those of us who sweated blood to get our filings perfectly accurate, and lost many nights of sleep worrying over the finest detail in our schedules, this post is just absolutely offensive.

(And BTW, where are the trustees in this little sermon? Are they disabled or impotent somehow?)

I don't know what the OP was getting at, but it left a bad taste in my mouth and I would just as soon not see anything like it again. I don't usually get an instant resentment toward something I read, but as far as I'm concerned this poster can pack up his self-righteous bs and leave right now. This got my hackles up.

[hendry70]

Failure to list an asset with fraudulent intent is a crime. Forgetting to list 30 bucks in a bank account you forgot you had isn't. This woman obviously had intent. If you're an attorney you really should know the difference.

[lrprn]

I'm sorry, but that entire post just sounds like an ad to me, and pointless: everyone who has ever looked at the forms or spoken to an attorney knows good and damn well that assets are to be disclosed: no sermons necessary.

Ummm, Fresh...this woman filed pro se. You can turn in anything you want on the forms when you don't file with a lawyer. Since she deliberately intended to hide assets, just because the forms say you shouldn't doesn't even slow down someone like this amoral, greedy woman.

this post is just absolutely offensive.

The link the OP posted is to a legitimate news story.

as far as I'm concerned this poster can pack up his self-righteous bs and leave right now. This got my hackles up.

I genuinely believe the OP was trying to be helpful, even though it was not helpful to you. We've had members here before who were angling to hide assets or find a way around clear parts of the current bk law. We also get new members periodically who don't understand they have to list every debt they have no matter how small when they file.

It's very hard to read someone's intent with only written words to go by. Have to say that what the OP said didn't strike me at all the same way as it did you, but that's ok. We don't always agree here - that's part of our forum's charm and adds zest to the posts! Be pretty boring if we all agreed all the time, right?

[SUB]

I genuinely believe the OP was trying to be helpful....

I went back and checked previous posts from Kentucky-BK. It appears the OP does try to link helpful articles. This one however, has gone very awry. The linked article is not about an average BK filer learning a tough lesson, as the referring post suggests. The woman in the article was either completely daft, or brazenly criminal.

[FreshLikeADaisy]

No problem, Lrprn. Thanks for presenting the opposite side of the coin. Sorry I was so nasty about it. It wasn't the actual article, it was the way it was presented as though angling to hide assets were the rule instead of the exception. I was pro se too, but that didn't take away from my burden: for me it added even more to that enormous responsibility of learning everything I could so that I did it right. Being pro se means that she saw every line of every form personally, and increases her personal responsibility as far as I'm concerned, unless she had a bk preparer mislead her somehow which is always a possibility. But even then... she signed 'em, she swore they were true, she swore under penalty of perjury that she was familiar with the contents of her schedules and that they were complete and correct. You said it perfectly: amoral and greedy.

See, I always feel for people who have worried and sweated and labored over their bk, because they're the kind of folks for whom such an admonition is not helpful but just an additional burden, fueling that kind of way too intense 3am wake-up-in-a-sweat horrible thought: "Oh my gosh, if I don't include the $1.83 I spent on a pack of TicTacs for my boy will they think it's fraud?!?!?" I was that way, and this kind of post would have had me awake for days, wondering if my failure to list every egg slicer in the house was going to get me sent to federal prison.

I am *well* aware that that is, um, extreme. (I never claimed not to be nuts.) But my heart always goes out to people who are so sincere and so overwrought by every little detail, and when a person is too scrupulous, like me, this sort of post can actually do some harm. Not the article linked, but the post.

But I see your point clearly -- I know you've responded to the dishonest kind of posts you've described because I've read them -- and I'm glad you mentioned it. We are all myopic from time to time; I think I probably was here. And as you said, we are all free to disagree. Thank you again for your calm voice and words of wisdom.

[One Half Full]

I actually found it helpful in that I am filling the paperwork out and owe my brother some money and did not realize I had to list him. Now I guess I will tell him I will need to give his name to the court. It will not please him. Now does this mean I can still pay him? We did not have a payment schedual. He said to pay him "any time" after I get out of this financial crunch and am back on my feet again.

[keepmine]

I actually found it helpful in that I am filling the paperwork out and owe my brother some money and did not realize I had to list him. Now I guess I will tell him I will need to give his name to the court. It will not please him. Now does this mean I can still pay him? We did not have a payment schedual. He said to pay him "any time" after I get out of this financial crunch and am back on my feet again.

Nothing in the code prevents you from paying anyone you please post dicharge.

[Flamingo]

BK fraud was NOT rampant before the new law, that is just crap. Yes, some people abused the system (and still do), but to say BK fraud was rampant is just crap, and to punish the 95% of legitimate debtors because of the actions of just a few was misguided by congress. (democrats and republicans)

There were stats quoted (sources also) in the years prior to the passing of the 1995 law which showed that over 50% of BK filings included fraud. That is a large amount which indicates fraudulent filings were numerous and taking place. Some people just took advantage of the system as it stood at that time. I do not have those quotes or stats on hand now with the passage of time but many of the reports and news items of that time should list the fraud percentages that were stated. Many cases were cited, the fraudulent practices taking place were unbelievable in some cases and just made it hard for those who were filing legitimately as fraud was one of the major concerns as to the passage of the new law. We filed in 4/2002 and while in our Plan, I would read of what some people did prior to filing that would make your head spin. News week or time in 2004 or 2005 had a large article on BK fraud if I remember correctly and the new law that was hanging at the time. There were many delays to the new law and many attorneys tried to get clients to file quickly cause they knew the new law would be passing in the next few years which would make filing much more difficult. The system has changed considerably; anything related to attempt to get away with something fraudulent is picked up much more easily.

[Flamingo]

Sorry, I meant 2005 law (not 1995)...(where's my coffee!!!!!)

[SUB]

There were stats quoted (sources also) in the years prior to the passing of the 1995 law which showed that over 50% of BK filings included fraud.

Well if the stats are true, it would lead one to believe the "fraud" they are referring to is an innocuous, less intentional variety, similar to many of the posters questions here. When most of us hear "fraud" we automatically think of situations like the Christina M. Leviskas story, which constitutes a very low percentage of BK filings both before and after "new law".