Reality TV star Abby Lee Miller of Dance Mom’s fame has been sentenced to Federal Prison for bankruptcy fraud for hiding and otherwise failing to disclose funds held in secret accounts.
Routinely during the process of interviewing clients and through the process of preparing the petition and schedules we encourage clients to provide us with details concerning their assets, debts, income and expenses. This is not an easy thing to do, but it is necessary. Consider the preparation of the asset portion of the bankruptcy questionnaire as though it were an inventory you were completing to recover for the loss of your property in a fire – yes it should be that detailed! Is the Trustee likely to seek forfeiture of your personal property? Not if it is within the exemption limits or will otherwise be costly or difficult to liquidate. Generally speaking trustee’s will gravitate to assets which are readily marketable and easily sold for cash. Bank accounts, tax refunds, inheritances, claims for personal injury, autos and real estate which have considerable equity are the common targets. A full disclosure to your attorney can help to prevent an unexpected claim of the trustee seeking turnover of such assets and will keep you out of the cross hairs of federal prosecutors for bankruptcy fraud!