Faced with the predicament of bankruptcy litigation, its
common to see people opting for various avenues to safeguard as much as assets
possible. Hiding assets is primarily one of them. Whenever you file for
bankruptcy in New York City under Long island bankruptcy
law,
it is mandatory to inform the court about all assets currently being owned. In
some cases of bankruptcy certain assets are sold to adjust against claims of
creditors. While certain types of assets are exempt from being seized, most
existing assets not necessary for survival are taken over by creditors. In such
a scenario it has been observed that individuals filing for bankruptcy tend to
suppress details about assets they actually own
This presents the opportunity to wipe off all debts while safeguarding
high value assets from being seized from creditors. If you consult New York
bankruptcy lawyers, you will always be advised that this is not actually a
smart idea.
It is only in very rare and
exceptional cases that some courts allow persons with zero or very low assets
to file for bankruptcy and clean off their debts. In such cases the creditors
get nothing out of it. This is the only legal way to get rid of debt without
paying a penny of it back. From transferring ownership of property to family
members, to shifting ownership of inherited property to distant relatives,
there are many ways tried out by people in financial distress. It's never
advisable to go for the easy way out by hiding assets and trying to
artificially create such a scenario.
There are in fact, a certain
range of properties which are exempt from seizure during bankruptcy litigation
and it makes no sense to try hiding it. This includes household appliances,
pensions, jewelry upto a certain value, vehicles upto a certain value,
necessary clothing and household items, pensions, public benefits and personal
injury damage awards. The creditors can't touch the above mentioned items for
recovery of debts and they stand safe and secure.
What are the primary items
which are not exempt according to New York bankruptcy law and are prone to
hiding? These include cash, family inheritance, vacation stay homes, second
vehicles, stocks and bonds, bank accounts, retirement benefits, co-owned
assets, rewards from other types of lawsuits. These items can be seized to pay
off the debts.
Why
Hiding Assets is a Bad Idea?
When an individual or a couple
file for bankruptcy, their case is assigned by the court to a trustee. This
trustee pours through all recent transactions, bank account details, online
activities and footprints, ownership documents, buying and selling deeds,
family wills, tax returns, etc. Information is gathered and built up through
scientific search, forensic audits and examination of online trails. If it is
discovered that major assets have been willfully diverted or hidden prior to
declaration, this can severely impact the bankruptcy proceedings and can also
result in a denial of bankruptcy by the court. This means that you will stuck
with all your debts and will have to deal with creditors all on your own and
cannot file for bankruptcy for a long period of time.
The best course of action
is to consult experienced New York Bankruptcy
Lawyers
and discuss on how to maximize your assets from being seized in a perfectly
legal way.
