When filing for bankruptcy in Utah, you are required to fully disclose all of your assets.
Of course you must provide documentation of your debts, expenses and financial history, but it is equally important to inform the courts about your income and property holdings as well.
The Asset Discovery Process
The court expects you to fully document all of your debts and assets using the appropriate Utah bankruptcy forms. However, the court will not simply take your word that you have provided complete information.
To verify your written statements, the court will appoint a bankruptcy trustee to review your documentation and to seek out any assets you may have neglected to list.
So how do the bankruptcy trustees find hidden assets?
First, they perform public record and online asset searches. Next, the trustee will review payroll records, bank documents and tax returns, in search of discrepancies. The asset discovery process also may include speaking with co-workers, relatives, neighbors and friends about your assets.
Before Filing for Bankruptcy
To avoid raising the court’s suspicions, don’t give away or sell any assets in the 12 months prior to filing for bankruptcy.
Giving away heirloom jewelry or a valuable car before filing your legal claim will not be looked upon favorably, as the court prefers that the items be sold to help satisfy your debts. A trustee may recover the items and use them to pay creditors.
Be careful about paying creditors before filing as well.
If you choose to pay only certain debts — even if you have the best intentions in mind — the courts may view the payments as “preferential transfers.” These creditors could then be forced to turn over the payments to the court to be distributed among all of your creditors.
What Happens if You Conceal Assets?
Honest mistakes happen.
If you accidentally leave an item off of your asset list, it’s critical that you immediately notify the court of your oversight. If you act as soon as you realize the error, the courts will understand that you did not intend to defraud your creditors, and it should not affect your case. If the trustee catches your error, your intentions might not be looked upon so generously.
Intentionally hiding assets is another story, and the straightest route to trouble in a bankruptcy case.
If you fail to voluntarily inform the courts of all your assets, the court may deny your bankruptcy discharge, leaving you responsible for paying all of your debts. In addition, the court can file criminal charges, as concealing assets is considered to be a form of perjury.
If you are found guilty of concealing assets, you could face a fine of up to $500,000 and/or imprisonment of up to five years.
Don’t compromise your legal filing status, no matter how tempting it may be. Here at Lewis Adams and Associates, we can help you work through the complex process of filing your case and declaring your assets.
Located in West Jordan, we serve clients throughout northern Utah. Contact our office today to learn more about the asset discovery process and bankruptcy filings in Utah.
There is life after bankruptcy.