A debtor who filed for Chapter 7 Bankruptcy ; but failed to disclose real estate assets was sentenced to 1 year and 1 day in prison followed by three years of supervision after release from prison.
Here are details of the case:
Phyllis Larsen's bankruptcy schedules said she owned no assets. During the meeting of creditors, Larsen said that she had not transferred or sold any assets prior to the bankruptcy filing. After the meeting of creditors, an investigation re¬vealed that Larsen had been purchasing a home on a land contract. Shortly before the bankruptcy filing, Larsen paid off the balance due on the contract and received a warranty deed. She then issued a quitclaim deed to a relative. Neither her interest in the home nor the transfer to the relative were listed in the bankruptcy documents.
As times get tougher it may be tempting to misrepresent your assets during a Chapter 7 or Chapter 13 bankruptcy case--don't do it. Misrepresenting your assets during bankruptcy is a crime and completely unnecessary. Bankruptcy laws allow an ample amount of exemptions especially in Texas, therefore even certain real estate may be exempt from seizure by creditors during bankruptcy. If you believe that you have significant assets you want to protect during bankruptcy speak with a bankruptcy attorney to find out your exemption options.