Bankruptcy Fraud
Thinking about NOT telling your Nebraska bankruptcy attorney about the extra bank account you have with a couple hundred dollars in it, the $5,000 inheritance you expect to receive soon, or your valuable Husker National Championship rings you won in 1994, 1995 and 1997? THINK AGAIN!
Just ask Dick and Janna Pierce of Kearney, Nebraska. The Pierces filed a Chapter 12 Farm Reorganization bankruptcy in 2003. In 2004, Janna, who owned a grant writing business, earned a $158,711.00 commission for a grant she had written on behalf of 10 Nebraska counties, including Buffalo County where her husband, Dick, served on the Board of Supervisors. Debtors are required to amend their schedules immediately upon having knowledge that they have an interest in property. The Pierces failed to notify the bankruptcy trustee of the commission, failed to amend their bankruptcy schedules to reflect the commission, and denied their creditors a chance to receive some of the funds.
The Remedy?
The Pierces were indicted by the United States Attorney for bankruptcy fraud in 2012, which carries a possible penalty of up to 5 years in prison, and a possible $250,000 fine, pursuant to 11 U.S.C. §152(1). Fortunately for the Pierces, the U.S. Attorney agreed to dismiss the charges today if the Pierces paid the Chapter 12 Trustee $20,000.00 for distribution to their creditors.
Denial of Discharge
Since the ultimate goal in a bankruptcy case, at least, any individual bankruptcy case, is a discharge of debt; having the discharge be excepted or denied would be a terrible situation. The bankruptcy trustee or a Debtor’s creditors can request that a particular debt be excepted from discharge because of fraudulent acts. Even worse is the total denial of discharge if the debtor committed an act such as hiding assets, transferring assets, fraud against a creditor, failing to inform or turnover property, destroying property, and similar acts.
Tell the Truth!
The best thing to do when filling out the paperwork you receive from your bankruptcy attorney is to disclose everything, no matter how minor you think it is. You hire a bankruptcy attorney to help you prepare the petition and disclose all assets. The last thing you want is to be behind bars, have your debts still intact after a denial of discharge, and then owe a huge fine to the government.
See what Hawaii bankruptcy attorney, Stuart Ing, has to say about bankruptcy fraud.