When people in Illinois are unable to repay their debts, some individuals may choose to file for bankruptcy to try to secure a discharge of their unsecured debt balances. When people file for bankruptcy, they are required to complete and submit schedules on which they list all their assets and liabilities. It is critical for people to be honest on these schedules and not try to hide or conceal any of their assets.
Asset discovery process
After someone has filed a petition for bankruptcy and his or her asset and debt schedules, the trustee will conduct an investigation to make sure the petitioner has not attempted to conceal any assets. This is done because the trustee can seize and sell nonexempt assets to repay a portion of what the petitioner owes to his or her creditors. During the asset discovery process, the trustee will carefully examine the asset and debt schedules to identify any inconsistencies. He or she may also review bank account records, pay stubs, online databases and tax returns and may talk to neighbors of the petitioner to get a clearer picture of his or her assets.
What happens if someone conceals assets?
If someone attempts to conceal assets when filing for bankruptcy, his or her case may be dismissed. He or she could also face criminal liability, including a fine of up to $500,000 and a maximum prison sentence of five years. This person may also be unable to discharge his or her debts in a bankruptcy case in a subsequent filing. Preferential transfers the trustee discovers that occurred in the previous 12 months can also be undone.
Being honest on all the schedules and bankruptcy documents is crucial. People who are dishonest about their assets are likely to be caught, and they could face serious consequences. Individuals who have questions about how to fill out their schedules or value their assets may want to get help from attorneys with experience in bankruptcy law so that they may be less likely to make critical errors on their paperwork.