If you would like to save yourself a couple of minutes, then we can go straight to the bottom line right off the bat: do not under any circumstances lie on your bankruptcy filing. This includes everything from blatant untruths to “little white lies.” Do not lie, and do not listen to anyone who tells you otherwise. When things go bad, they will not be held accountable or pay the penalty: you will.
And now for the slightly longer version of why lying on your bankruptcy filing is one of the worst things that you can do — not just on your filing, but probably in your entire life. Here are the three terrifying scenarios that await you if you unwisely head down the road of deceit:
- Dismissal of Your Case
- Loss of Assets
- Criminal Charges
Lying in your bankruptcy filing could lead to your case being dismissed with prejudice. What does “with prejudice” mean? In practical terms, it means that your debts could be deemed non-dischargeable, and you may be barred from filing for bankruptcy for many years. What’s more, your credit report will state that you filed for bankruptcy, even though you did not benefit whatsoever from any of the protections. Talk about adding insult to injury!
Do you know that speedboat that you love so much? The one that your work colleague “who knows a guy, who knows a guy, who lives next door to a guy who knows all the ins and outs of bankruptcy” told you to leave out of your bankruptcy petition because, well, “who’s going to know?” Well, the trustee is probably going to find out, because they’re experts at ferreting out non-disclosed assets. And then you’re going to lose your beloved speedboat, and your colleague at work is just going to shrug and say “oh well, that’s life!”
There is no way anyone should sugar coat this cold, hard truth: lying under oath, making false statements, and attempting to hide assets is fraud — and you could be charged with a federal offense. If found guilty, you could be fined up to $250,000 and/or spend up to five years in jail.
With all of this in mind, it is also true that mistakes in a bankruptcy filing can happen. For example, some people forget to list an asset, list an incorrect value for an asset, forget to list a creditor (e.g. a distant relative to whom they owe money), or forget to list income from a minor side business (e.g. occasionally selling stuff on eBay, earning a little extra money driving for Uber, etc.).
Obviously, you want to avoid mistakes as much as possible — and working with an experienced and reputable bankruptcy attorney will help ensure that. But if a good-faith mistake happens, then don’t panic: it’s very unlikely that your case will be dismissed, your assets seized, or that you will be charged with a crime.
What you need to do — right away — is fix any mistakes by filing an amendment to your bankruptcy petition, and informing the trustee. If you are being represented by a bankruptcy attorney, then this will be taken care of on your behalf.
To learn more contact the Law Office of Charles H. Huber. We have over 30 years of experience filing consumer bankruptcy cases. Our experience is your advantage!