What Are The Penalties For Not Disclosing Assets In A Bankruptcy Filing?
Interviewer: On your website, I think you had a case involving a woman who didn’t disclose she owned jewelry. What some people may not really know is: what are the consequences a person can actually face if that information is disclosed after a bankruptcy filing? If her case was sent to the Department of Justice, what are people facing?
The Penalties: A Substantial Fine And Lengthy Prison Sentence
Vance: A $250,000 fine and/or five years in prison. Depending on the judge, a person could be facing both.
Thankfully, I hardly ever see that. That was the first time that that has happened. You go through the questionnaire and you ask them, “Do you have any jewelry?” and you are told, “No.”
We show up at the hearing, she just recently divorced, and the trustee puts her under oath and asks her, “Do you have any jewelry?” and she told him, “No.” He pulls out the insurance rider that her ex-husband faxed over to the trustee that showed $30,000 worth of jewelry. He said, “What happened to this jewelry?” “Oh, I still have it.”
Interviewer: It’s not something that happens very often but obviously the consequences are dire.
Vance: He could have referred that out to the Department of Justice but he made a deal, she had to pay back $25,000.
Interviewer: That’ll definitely make people reconsider keeping a $5,000 item off of their list.
Vance: Exactly right.