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The Consequences of Hiding Assets From the Bankruptcy Court

It may not seem like a big deal.  You’re filing for Chapter 7 Bankruptcy and you have some property or money that you don’t want to be sold to pay your creditors.  And why should you? After all, it’s your property and you should be able to decide what happens to it, right?

It doesn’t work that way.  When you file for bankruptcy, you’re saying there’s absolutely no way that you can continue making your current payments.  Deciding to file for bankruptcy is not a decision that should be taken lightly because it will have huge impact on your entire financial situation and everything that you own.  You may be able to keep your home and your car but anything else of any real value is up for grabs. They’re your debts and you need to pay as many of them as you can and that means liquidating some assets to do so.

So if you’re thinking of hiding assets from the bankruptcy court, first ask yourself this question (in your best Dirty Harry voice):

Am I feeling lucky?

What Are Hidden Assets?

As part of the bankruptcy process, you have to list all of the debt you have that needs to be discharged but you also need to list everything you have that is considered an asset that can be sold to pay some of your debt.

There are several ways that people may try to hide assets.  They may just lie about their existence or they may ask someone to hold them or transfer them to another person’s name.  Some people may even go as far as creating fake documents to cover their worth.

If it is discovered that you have hidden assets, you don’t go back to square one.  There’s no starting over. Doing it intentionally has serious consequences.


Your list of assets is a legal document that is signed “under penalty of perjury” which means you’re under oath and subject to any penalties for lying to the court.  You could go to jail. Neglecting to disclose all assets or transferring them to someone else is considered bankruptcy fraud and you could be facing a fine of up to $500,000 and/or 5 years in prison for each charge.

If that’s not bad enough, the bankruptcy court will deny your discharge which means you’re still on the hook for paying your creditors anything that is owed them.  This doesn’t mean your bankruptcy is null and void, however. Having your debts discharged is off the table, but the bankruptcy will still be on file, damaging your credit.

Want more?  Your bankruptcy trustee will still have the authority to sell all of your assets, including the ones you attempted to hide, in order to obtain some kind of compensation for your creditors.  And you’re still responsible for any debt leftover after that.

I’ll just file for a new bankruptcy, you say.

Think again.  Any debts that were listed in a bankruptcy that was revoked or denied will not be allowed in any bankruptcies filed at a later date.  Ever.

If you do happen to slip those assets by the eagle-eyed trustee, you’re not in the clear.   If they’re found after the discharge, the trustee can have the discharge revoked, leaving you to pay your creditors and they have up to a year to find the assets and revoke the discharge.  If the hidden assets are found, the trustee in charge of your bankruptcy will file a lawsuit against you with the bankruptcy court and if you are found guilty, your discharge will be denied.  And you’ll still be responsible for the debt. And you still may face criminal charges.

If criminal charges are filed, they will not be heard in Bankruptcy Court, but instead you will appear in Federal Court because it is a federal crime.

The Trustee’s Job

It is the job of the trustee of your bankruptcy case to ensure that all assets are listed.  They’re not going to merely take your word for it. They have various methods to verify your assets that include searching online, searching for public records, bank records, tax returns, and payroll records that may show deposits into undeclared accounts.  The trustee isn’t looking to put anyone in jail, but it is important that he or she performs their job thoroughly.

Accidental Omissions

Your bankruptcy lawyer will be able to tell you exactly what you need to include as assets but occasionally, things are simply overlooked.  Some of the more common missed assets are:

  • Lottery winnings or annuities
  • Retirement benefits (whether you’ve received them or not)
  • Inheritances (even if they haven’t made it out of probate yet)
  • An asset that is co-owned with others
  • Lawsuits that have been filed or lawsuits that you may potentially file

Fortunately, a simple oversight can usually be rectified with an amendment.  If you realize that you’ve accidentally missed some assets, notify your bankruptcy lawyer immediately.  In most cases, as long as your intent was not to hinder, delay, or defraud the court, the situation can usually be handled without the ramifications of having done it intentionally.  It’s always better to come forward if you’ve found a mistake than waiting for the trustee to discover the omission.


If you don’t want to put up all of your assets, there are alternatives.  You can file for Chapter 13 Bankruptcy where, rather than liquidating your assets, arrangements are made with your creditors to make payments that fit into your monthly budget.  The duration of these payment plans is usually 3 years.

Debt consolidation may be an option, as is attempting to work directly with your creditors for a payment plan, although some are more agreeable to this than others.

If you’re considering filing for bankruptcy and have questions about your assets, we’d love to help.  The attorneys at Miller, Hollander, & Jeda have been practicing bankruptcy law in Central Florida for more than 35 years.  They handle each case with professionalism and expertly guide you through the bankruptcy process so you can have a fresh financial start as soon as possible.  Call today at (239)775-2000 for a free consultation