Bankruptcy Fraud Cases Hiding Assets 

When filing bankruptcy, you have to list all of your assets. Some assets will be exempt from bankruptcy filing and the bankruptcy trustee will not liquidate those assets to pay off your debts. However many people hide their assets in the bankruptcy filing. By not declaring all of their assets and hiding some assets from the bankruptcy trustee, they hope to get away with it and not have to liquidate them to pay the creditors. Another common thing a debtor does is purposely over-valued their exempt properties. Some debtors will unlawfully transferred assets out of his or her name.

What happens when a debtor hides assets in the bankruptcy court and filing?

The trustee will initially examine all the assets and determine which assets are exempt and which are not. If the trustee does not find any assets then he or she is likely to just move on and classify the bankruptcy case as having no assets. Re-investigation does not happen often. However if either the trustee or the creditors suspect that the debtor is hiding some assets then further investigations will be under way.

How will the trustee investigate?

The trustee may interview  creditors and witnesses, research public records or ask the debtor for more information. If the debtor does not come forward with the necessary information the trustee may take the investigation further and ask for documents or take depositions.

If there is an illegal transfer of properties or assets then the trustee can sue the debtor to recover the assets that were transferred in an attempt to defraud the creditors. Any payments of more than $600 worth or assets within 90 days before the bankruptcy filing will red flag the trustee.