Fraudulent Concealment and Transfers in Bankruptcy
Never lie or keep secrets from your bankruptcy attorney. Anything you say to your bankruptcy attorney is covered by attorney-client privilege. There are many reasons why a person may want to avoid disclosing information to their bankruptcy attorney. Here are some examples of things to discuss with your attorney:
- You have asset you want to keep. Your bankruptcy attorney will help you plan and make the most of your bankruptcy exemptions. You may be able to keep cash, equity in your home, your car, etc. provided your petition is accurate and the exemptions have been properly applied. Assets such as your 401K or retirement account are fully protected by the bankruptcy code.
- You have given assets to a friend or relative. Many people think this is an effective way to protect an asset such as a house or car. If you have transferred any assets it is your best interest to tell your attorney. It may be advisable to wait or to transfer assets back. Your attorney will be able to give you advice on how to proceed with your bankruptcy. You normally have exemptions that allow you to keep most or all of your property. But you can only exempt property that is in your name. You cant exempt and keep property that you transferred. If the person didn’t pay you the fair market value for the property then the Trustee may be able to take it. Normally giving away property is the worst strategy you can do.
- You have charged a high dollar item on a charge-card. It’s not a good idea to make a large purchase just prior to filing bankruptcy. Sometimes lenders will file an adversary proceeding claiming you made a large purchase knowing you would be filing bankruptcy soon or that you would be unable to pay. If they are successful they may obtain a judgment that the amount you charged just before filing is still due and owing. You may have to repay for the item. Some purchases, such as house or car repairs may be easy to explain. By explaining this to your attorney he will help you formulate a plan on how and when to avoid or settle such a claim should one arise.
Speak to your attorney
This list is not all inclusive but it explains some of the problems we commonly run into. Always be completely truthful with your attorney and openly talk about your goals in filing bankruptcy and questions. Your bankruptcy attorney will ask many questions as the process continues. Be sure to answer all questions fully and honestly and do not hold back information because you are embarrassed or think it’s unimportant. Most likely the information you hold back will be known to a creditor or a bankruptcy trustee anyway.
Your bankruptcy attorney will be best able to assist you if you tell him all the facts.