It Is Almost Impossible to Hide Assets; Eventually, Bankruptcy Fraud Is Uncovered

And it's not worth jeopardizing my license because you don't want to disclose something that you transferred. And the government will get you.

I have another story here with another client that came in. She had just gotten a divorce and I go through the questionnaire and ask her if she has any jewelry.

Your Bankruptcy Trustee Has Resources at His or Her Disposal to Uncover Assets

She answered, "No, I don't have any jewelry." We file the bankruptcy, and we go to the meeting with the trustee. He puts her under oath, and he asks her the same question. She said, "No, I don't have any jewelry." He pulls out this piece of paper.

If an Asset Is Unintentionally or Intentionally Not Properly Disclosed, You Need an Attorney to Help Negotiate an Equitable Repayment to the Estate

It's the insurance policy from the homeowner's policy when she was married, an addendum page from the insurance policy for jewelry, that showed she had $34,000 in jewelry that her ex-husband faxed to the trustee. We had to negotiate that. She's just getting out of that issue.

He could have referred her case to the Department of Justice for criminal investigations, but he didn't. We negotiated a deal, and this is where your attorney comes in handy. We negotiated a fair deal, she didn't have to pay back all $34,000 but she had to pay back at least half of it.

Interviewer: I'm sure she was pretty shaken.

Vance: Yes, when he pulled out that sheet of paper I was surprised as well. She admitted it, and the trustee said, "We can either negotiate something or I can send you to the Department of Justice and deny your discharge." Luckily, she got her discharge in the bankruptcy, but she had to pay back about half of the $34,000.

Your attorney has a lot to do with that. The trustees know which attorneys they can trust and which ones they have to be on the lookout for. Because of my full disclosure policy, they know that I've done my best job to find out what they have.

The Trustees Do Not Necessarily Want to 'Punish' Bankruptcy Applicants for Not Complying with Full Disclosure but They Do Have the Option at To Refer the Case to the Department of Justice

If they find an asset you did not disclose, the trustee does not want to send anybody to jail. But after they find out you didn't disclose everything, if you don't work with them, you will face the consequences.