A contractor from Ocean County, New Jersey, admitted earlier this month to concealing assets in his 2008 bankruptcy case. He pleaded guilty to the charge in front of a U.S. District Court judge in Newark. The contractor is currently awaiting sentencing for the crime.

Some of the items that were concealed included $174,865 in financial accounts, about $13,000 in household goods and a truck valued at $10,000. In his petition, the contractor claimed to only have $3,000 in a checking account, $3,700 in household goods and a pickup truck valued at $8,000.

All told, prosecutors alleged that the contractor concealed almost $200,000 in assets.

Honesty is Critical in Bankruptcy

Most debtors who enter into Chapter 7 or Chapter 13 bankruptcy are expected to use their assets to repay a portion of their debts. Many feel tempted to hide assets in the hopes of being in a better financial position once the bankruptcy is over.

It is important for bankruptcy filers to understand that hiding or transferring assets can have significant negative repercussions. Intentionally keeping assets out of creditors’ reach is the quickest way to get a bankruptcy dismissed, removing the filer’s chance to obtain debt relief.

A bankruptcy trustee can also bring criminal charges when he or she feels that the filer is abusing the protection of the court. Criminal penalties in bankruptcy fraud cases range from dismissal of the case to five years of prison and $250,000 in fines for each count of fraud.

Source: J Town, “Local Contractor Facing Charges of Concealing Nearly $200,000 in Assets in Bankruptcy Case,” May 1, 2012.