The Arizona Bankruptcy Lawyer Blog has posted an article that discusses why it’s so important for you to be honest about your assets when you’re filing for bankruptcy. You can’t pick and choose what assets or debts to include while filing, you have to list any and all you may have.
However, just because you list an item of property on your bankruptcy schedules and statements that are filed on your behalf with the Bankruptcy Court does not mean that you will automatically lose that item of property to the trustee administering your Bankruptcy case. To the contrary, it is very possible that your state has a law on the books that would shield that particular item of property from being lost to your bankruptcy trustee, thereby making it “exempt.”
Sometimes people come up with grand schemes to make a property or asset “disappear” by getting rid of it at the last minute or by selling it to a friend or family member with the intent to purchase it back. This type of scheme can have very serious and unfortunate results. Recently, a couple from Iowa tried to cheat their creditors out of $380,000 when they were filing for bankruptcy. Mr. and Mrs. Schuerer attempted to unload some of their assets by selling them to friends and family members right before their bankruptcy case was filed and intended to purchase them right back after the case went through. The couple was found out, spent time in jail, has been ordered to pay $394,984.00 in restitution to the United States Trustee, and has also been required to pay substantial fines to their creditors.