Why Hiding Assets in Bankruptcy is Bad

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.