Trying to Hide Money from the Bankruptcy Trustee is a Terrible Idea
There are a lot of myths and misconceptions about bankruptcy. Some people think that they can hide money from the bankruptcy trustee by stashing it away in a safe place, like under their mattress. Others believe that they can protect their assets by giving them away to friends or family members before filing for bankruptcy. When filing for Chapter 7 or Chapter 13 it is typical to feel like you are loosing everything and want a head start at building on the future.
Neither of these strategies will work. Here’s why:
First, all of your assets become property of the bankruptcy estate when you file for bankruptcy. This means that the trustee can demand that you turn over any cash or other assets that you are hiding. If you don’t cooperate, the trustee could ask the court to hold you in contempt, which could result in fines or even jail time.
Second, any gifts or transfers of property that you make within two years of filing for bankruptcy can be reversed by the court. This is true even if you had no intention of hiding the asset from the trustee. So, if you give away cash or transfer ownership of a valuable item to someone close to you and don’t receive fair market value in return, the trustee could demand that the recipient return the property to the bankruptcy estate.
Finally, it’s important to remember that bankruptcy is a legal process designed to help honest people who are struggling with debt. Hiding assets from the trustee does not reflect well on your character, and it could jeopardize your discharge and chance of getting a fresh start through bankruptcy.
Oftentimes, pre-filing strategies exists that can be used to resolve issues with non-exempt assets. Different types of bankruptcy cases exist to match up with what issues you have so that you can get a fresh start. There is never a reason to hide money or assets.
If you are considering filing for bankruptcy, it’s important to work with an experienced bankruptcy attorney who can help you navigate the process and ensure that you comply with all of the rules and regulations. If you would like a free consultation with an experienced Tucson, Arizona Bankruptcy Attorney – Contact us today at (520) 777-2198 to schedule a consultation or fill out the form.
