The other day I wrote a post about whether or not the trustee would come to your house if you filed bankruptcy. The answer, generally speaking, is no. However, if the trustee gets the sense that you are not being truthful about your assets, she might send out an appraiser to verify that what you listed on your petition is what you own.
This scenario was written about in an article in the St. Petersburg Times the other day. According to the story, more and more debtors are being investigated and prosecuted for lying on their bankruptcy petitions.
They interviewed one trustee who has learned to spot the signs of a debtor lying about his assets: “A nervous tic of the eye. A slight hesitancy in answering. Or blubbering on about the circumstances that drove them to bankruptcy.” There is also the “ex factor” Ex-spouses or ex-employees can show up in the middle of a bankruptcy and share what they know about the debtors assets and disclose something the debtor didn’t. Other things that the trustee in the story looks for is discrepancies between their debts and their assets.
Bottom line is that it’s better to not try and outsmart the trustee or bankruptcy court. Disclose everything. Remember that in return for the possibility of giving up some of your assets, you are either getting rid of your debt or getting a chance to reorganize your finances. If you’re incredibly attached to a piece of property that you have to give up if you file, bankruptcy might not be for you.
You can read the story here.