What is Bankruptcy Fraud?

When filing for bankruptcy it is imperative that you disclose all of your assets and income to your bankruptcy attorney so that you can avoid bankruptcy fraud and avoid not receiving a discharge of your debt in bankruptcy. It appears that former Major League All-Star Lenny Dykstra may not have disclosed all of his assets in his bankruptcy and is now being indicted for bankruptcy fraud. Mr. Dykstra is accused of hiding more than $400,000 of assets that should have gone to his creditors as part of his bankruptcy estate. He is accused of selling, destroying and transferring his property immediately prior to filing his bankruptcy case. His legal troubles could have been avoided if he just disclosed all of his assets to his bankruptcy attorney prior to filing his case. This is usually done through a bankruptcy attorneys questionnaire that a debtor is provided prior to filing bankruptcy.

Most debtors want to know why they have to disclose certain debts or assets. In bankruptcy, all debtors and assets must be included regardless of whether you want to list them or not. Just because you list an asset doesn’t mean you will lose it, in fact there are several bankruptcy exemptions that allow for debtors to keep property. Unfortunately in in order to file bankruptcy, a debtor must give full disclosure, there are no exemptions. Debtors should avoid transferring property in order to hide assets right before filing bankruptcy. Especially if you transfer property to family members, as that raises suspicions. It also should be noted that whether you are a former major league baseball player or an average Joe six pack, you may be found guilty of bankruptcy fraud should you decide to deceive the bankruptcy court and your bankruptcy lawyer.

If you have additional questions regarding pre-filing actions please call Symmes Law Group at 206-682-7975