Concealed Assets? Blaming it on your Bankruptcy Attorney Will Not Work
Against the advice of their bankruptcy attorney some clients try to conceal assets in bankruptcy. Despite the clear instruction from their attorney to disclose all assets in bankruptcy, the reminder that concealing assets in bankruptcy may constitute a bankruptcy crime, and the Section 342(b) notice given to the client at the outset of representation, some clients think they will benefit by hiding assets in bankruptcy. These clients may later find themselves facing investigation for perjury and think they can get out of it by placing the blame on the bankruptcy attorney. The client may
lie claim “but I told my bankruptcy attorney about the assets and he said that we didn’t have to list them.”
Here’s why this tactic of deflecting blame onto your bankruptcy attorney will not work:
- We already told you not to do it. Every Sacramento bankruptcy attorney gives a prospective client a Section 342(b) disclosure during the free consultation which says “A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury, either orally or in writing, in connection with a bankruptcy case is subject to a fine, imprisonment, or both.” Every bankruptcy attorney has their client sign a piece of paper that confirms that the disclosure was given and received.
- We sent you a letter. It is an unfortunate truth in the practice of law that most of the letters attorneys send to clients are to confirm previous conversations. This tedious necessity of documenting conversations and interactions is done primarily for the purpose of protecting ourselves in later disputes. If you concealed assets in bankruptcy, the attorney likely had a sixth sense that you were up to no good. In turn, the bankruptcy attorney probably mailed you a letter to the effect of “don’t conceal assets in bankruptcy. It’s a crime.” This letter will help protect the attorney should you fabricate a story of how the attorney said that it was OK to omit assets in bankruptcy.
In short, don’t conceal assets in bankruptcy. If you do conceal assets placing the blame on your attorney has a very small chance of success. It is far better for both you and your attorney to be candid in disclosing assets on the petition and schedules and to trust in the bankruptcy system.