What if I Lie when Filing Bankruptcy?

People filing bankruptcy often ask what happens if they lie when filing bankruptcy, either on the bankruptcy filing form or in the bankruptcy court or the bankruptcy trustee, bankruptcy judge or clerk.

Why do people lie in the bankruptcy court?

There are many reasons why someone filing for bankruptcy might lie to the bankruptcy court or bankruptcy trustee. The most common reason why people lie in the bankruptcy court is to hide assets. They are afraid that their assets will be taken away if they are truthful in the bankruptcy court or the bankruptcy trustee.

Bankruptcy and Lie When filing for bankruptcy, you must sign the bankruptcy papers. The bankruptcy papers are signed under penalty of perjury. In another word, you are swearing that everything you have declared in your bankruptcy papers is true to the best of your knowledge.

What is the penalty for lying in the bankruptcy court or in the bankruptcy papers?

Under the federal bankruptcy law, if you purposely lie to the bankruptcy court, in bankruptcy papers or to the bankruptcy trustee, you can be prosecuted for fraud. If you are dishonest to the bankruptcy court or process in any way, the penalties are severe and you can be sent to jail for defrauding the bankruptcy court.

In general, if you want to hide some assets from the bankruptcy court, it is best to seek legal advice. Do not try to fool the bankruptcy court. Fraud has much worse penalties than bankruptcies.