When filing for Chapter 7 or other forms of bankruptcy, some Illinoisans wonder which assets they need to list and which can be safely excluded. Thinking that some assets need to be listed while others can be ignored creates tempting scenarios.
Take, for instance, out-of-state real estate. It can be enticing not to report it. After all, who will know. Or consider an auto-accident that has just started. It could be years before the case ends. Why does the bankruptcy court need to know about a possible settlement or judgment so far away? Or think about bank accounts in which the person may be the beneficiary even though the account is not in their name.
Can an Illinoisan safely conceal these assets during a bankruptcy? No. Doing so may not only invalidate the bankruptcy but also lead to federal criminal charges. Not fun.
These federal bankruptcy criminal charges run the gamut from concealing property to giving false testimony to offering a bribe. Indeed, there are more than 15 types of criminal charges that criminalize pretty much all forms of dishonesty from omitting information to actively concealing it.
If a bankruptcy judge or trustee gets a whiff of fraud, they have the authority to direct the matter to the U.S. Attorney's Office. The U.S. Attorney's Office, in turn, has stepped up its enforcement of these crimes.
If a person finds themselves in the crosshairs of the U.S. Attorney's Office, the key question will be intent. Did the person try to fool their creditors and the bankruptcy court, or was it merely an innocent mistake? The answer to that question will go a long way toward deciding just how much punishment a person will receive.
To avoid this and other landmines, Illinoisans considering Chapter 7 or other forms of bankruptcy may benefit from speaking with an experienced bankruptcy attorney.
Source: FindLaw, "Criminal Consequences Of Concealing Assets in Bankruptcy," Accessed Nov. 8, 2016