It is a crime to hide information about assets from the bankruptcy court. Bankruptcy Fraud is the common term. Read about it at 18 USC 152(3)
The first few lines of this section of U.S. Code read:
A person who-
(1) knowingly and fraudulently conceals from a custodian, trustee, marshal, or other officer of the court charged with the control or custody of property, or, in connection with a case under title 11, from creditors or the United States Trustee, any property belonging to the estate of a debtor;
(2) knowingly and fraudulently makes a false oath or account in or in relation to any case under title 11;
(3) knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11;
the last line reads:
“shall be fined under this title, imprisoned not more than 5 years, or both”.
Just a few weeks ago a woman in Idaho was indicted on fraud charges related to a bankruptcy case she had filed in 2005. See Former Mullan Woman Charged with Bankruptcy Fraud
She seems to have attempted to hide a house. I would imagine that a house is hard to hide, although I’ve never tried.
She obviously hadn’t sought some basic legal counsel prior to her decision or simply didn’t want to believe the counsel she received.
In my experience, the former is common but the latter problem is as well. Often, a potential bankruptcy filer will whisper “just between you and me”, and then proceed to tell me about an item that may have been signed over to an old friend.
The inevitable follow up…, “if they can’t find it why do I have to disclose it, I mean are they going to come to my house”?
A house visit is unlikely, but as an officer of the court, no attorney in their right mind is going to collude with that client in hiding the asset. Yet, I am certain that a few bankruptcy filers try it anyway after being told what could happen.
If you are considering bankruptcy, it will be a wise move to just tell your attorney everything…Just go overboard. You will be surprised that many things are protected in bankruptcy, can be protected in chapter 13, or can be dealt with in some other legal manner.