The Bankruptcy Alphabet – X is for the X-Factor

How will anyone know if you lie on your bankruptcy papers or lie to your bankruptcy attorney? The X-Factor.

Disclaimer: When clients ask me, “how will anyone find out if I lie?” little red lights & sirens go off in my head. If you’re thinking about being anything less than 100% honest with me, you need to find another lawyer. But the answer to the question is The X-Factor. Undisclosed assets or income are frequently uncovered by bankruptcy trustees thanks to ex-spouses, ex-friends, or ex-business partners.

No one can keep all their financial secrets from everyone. Think the bankruptcy trustee won’t find out about that collection of Roman coins that you were able to keep in your divorce? Your ex-spouse is likely to be the first to drop a dime. The $500,000 you made in a business deal four months ago? The business parter who thought he deserved a bigger cut will be making a call. Any assets or income you have are known by someone. Have you made anyone mad? That “X” will probably make a beeline to your 341 meeting to inform the trustee that you lied on your bankruptcy paperwork.

Most bankruptcy filers are honest people. But the court records are full of people who thought they could pull a fast one and outsmart the system. More often than not, those people lost assets or lost their right to a discharge. In extreme cases, they ended up in federal prison. Because we don’t look good in orange, most bankruptcy attorneys refuse to lie for any client. If you’re thinking about lying and filing bankruptcy, be sure to consider the X-Factor.

Bankruptcy attorneys from around the country are taking part in this “Bankruptcy Alphabet” exercise. Please take a few minutes to check out these other blog posts on the letter “X.”

Ex-Spouse – Maui Bankruptcy Lawyer, BankruptcyHI.com
OEX – Bay Area Bankruptcy Lawyer Cathy Moran
Xantusiidae – Cleveland Bankruptcy Attorney Bill Balena
Xenagogue – Omaha/Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
Xenocracy – Jay S. Fleischman, New York bankruptcy lawyer
Xerox of Your Financial Life – by Livonia Michigan Bankruptcy Attorney, Peter Behrmann

Image Credit: Steve Snodgras/flickr

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