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5 Reasons Why You Should Never Lie to the Bankruptcy Court

Posted By Allmand Law Firm, PLLC || 22-Aug-2016

There are too many debtors who think they can file bankruptcy protection and feel the court doesn't need to know everything about their finances. The bankruptcy code was established with federal regulations providing a fair option for debtors who truly need financial help. When individuals abuse the law for their own benefit, they can face serious consequences, including criminal charges.

Here are just a few reasons why lying during a bankruptcy proceeding is not a good idea:

  1. You may still be responsible for paying debt obligations and not qualify for discharge. Your debts will not be wiped out and creditors can still pursue you for payment.
  2. You may be required to sell or turn over personal property you tried to hide to creditors to settle outstanding debt, even during an active bankruptcy case. In many cases, if you were honest in the beginning you may have been eligible to use state and federal exemptions to legally protect assets.
  3. Any discharge you received can be revoked by the trustee during or after your case. This means you can once again become responsible for repaying creditors.
  4. If you file bankruptcy again in the future you may not be able to discharge debts from a case in which you were not being truthful.
  5. You can face serious criminal charges for bankruptcy fraud. This most commonly happens when debtors attempt to conceal assets. Bankruptcy fraud is a federal crime that carries stiff penalties, including up to $250,000 in fines and up to five years in prison.

Being deceitful during bankruptcy proceedings is illegal, and it can cost you far more than what it’s worth. By working with an experienced bankruptcy lawyer, you can learn more about your unique financial situation, available options, and how to best position yourself to protect certain assets and achieve an outcome that helps you on the path toward a brighter financial future.,

If you have questions about filing bankruptcy in the Dallas / Fort Worth area, contact Allmand Law Firm, PLLC for a free financial empowerment session. Our legal team is here to help!

Categories: Bankruptcy Fraud
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