Filing for bankruptcy is an option when your debt seems out of control. Usually, it is a great way to protect some of your assets, especially those that are used in the production of income. But what happens if you forgot to mention that $150,000 you received when you sold your home? Or the cash you have sitting in the offshore account?
Failing to disclose what seem like minor amounts of money or low value assets can affect your bankruptcy proceedings.
The purpose of bankruptcy is to help you reorganize your debt while at the same time providing a measure of protection to your lenders. You get the opportunity to get your finances under control and the creditors get to recover at least part of what you owe.
When you willfully buck the system or commit fraud, the court finds a way to make you pay for it. Hiding assets is definitely frowned upon, not just in Ohio, but in all states.
Filing for bankruptcy is complicated and requires a significant amount of documentation. When considering bankruptcy, take the time to understand the process and what can affect your eligibility.
Abusing the process
Not disclosing all of your assets puts property that would otherwise be considered exempt at extreme risk. Exempt assets include retirement accounts, life insurance policies, and any property that is directly related to the production of income.
If the court discovers that you have failed to disclose all of your assets, it can instead take the value of the hidden property away from you by leveling a surcharge on one of your exempt assets.
By trying to keep that money in your offshore account set aside for a fresh start, you could possibly lose your car, a portion of your IRA, or even your house.
Do it by the book
To protect your assets, you have to disclose your assets. The court system takes fraud very seriously and will not hesitate to liquidate property you thought was safe.
When you're gathering your documentation to file bankruptcy, you not only have to list all of your creditors and the amounts owed to each, you must also list every single asset you own. Transferring title just before filing may not save you either. Remember that the court examines the timing of transfers as well as the current state of your holdings.
If you are considering bankruptcy, make sure you are in compliance with the court's requirements. Contact an Ohio attorney experienced with bankruptcy proceedings to begin the process today.