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Honesty is the Best Policy, Especially in Bankruptcy

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There are many myths about bankruptcy. Many of my potential clients have been scared into thinking that they will lose everything they own and never be able to get credit if they file for bankruptcy.

Here at Steidl & Steinberg, we go out of our way to explain to our clients that they will not lose their property when filing for bankruptcy and they will be able to rebuild their credit afterward. Despite all of our assurances, the fear that myths have instilled in our clients will rarely cause someone to withhold information about assets and debts.

Don't Withhold Information

Withholding information from your attorney is always a bad idea. Doing so almost always ends up in you losing the property that you were trying to protect. In most instances, if the client had been truthful from the start, we could have protected the property and the client would not have been in danger of losing anything.

People who are not truthful with their attorney and the court are not only at risk of losing their property, they are also at risk of losing their freedom. All of the information you provide to the bankruptcy court, both on paper in your petition and in person at the hearing you will have to attend after filing, is given under the penalty of perjury. If you are not totally truthful, you could face fines of up to $250,000 and up to five years in prison.

There Could Be Consequences to Lying

Recently, a story was reported on the Bethesda-Chevy Chase Patch website about Diana Stout, who was sentenced to 27 months in prison and fined $155,747.83 for lying to the court. In addition to failing to tell the court about two cars, stocks and a diamond bracelet she owned, Stout told the court that her daughter had paid her $75,000 in exchange for selling her a piece of real estate.  In reality, Stout’s daughter paid her no money and received the property as a gift. No matter what your motivation, transferring property as a gift prior to filing is not permitted, because the court feels you should have sold the property for fair value and uses the proceeds to pay off your debt. By failing to be honest, the court sold the property she gifted to her daughter and Stout was convicted of perjury.

The attorneys at Steidl & Steinberg are here to help you keep the things you want to keep while still getting your debts under control. We do not want to see you end up like Ms. Stout.  In order to enable us to do that, you must be truthful. You should not let the unfounded fear of losing what you own prevent you from considering bankruptcy. If you are having debt problems, give us a call to schedule a free consultation.

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This entry was posted in bankruptcy, Bankruptcy, bankruptcy court