The article was tucked into a corner of a recent edition of the Pittsburgh Post-Gazette, Page 6, just five paragraphs. But it was screaming at me: “Man found guilty of bankruptcy fraud”. No capital
letters, just the statement. And I was curious.
Here is what happened, according to the article, a local businessman failed to tell the Bankruptcy Court that he owned several dozen antique weapons as well as a vacation home. Not enough, he
also didn't mention his vintage pre-World War II Ford, some snowmobiles, and income he had accumulated from the sale of some of his assets. The federal jury assigned to his case convicted him. He hasn't been sentenced yet, but I would guess that he will find it difficult to stay out of jail.
What is especially ironic is that the U.S. Bankruptcy Code allows us to keep so much of our client’s property out of the bankruptcy altogether, meaning that most of our clients will not have
to even deal with the issue of losing anything that they own. But we can’t keep anything out of the bankruptcy unless we know about it.
Most of our clients don’t have anything like what this businessman was said to have concealed, but I am still constantly reassuring our clients that they will not lose their house, or
their car, or their kids.
We have a fail-safe method of keeping our clients out of jail. We tell our clients to tell the truth.
Simple, eh? You would think.
We ask them about their assets and debts when we meet with them. Our attorneys and paralegals question them again at the time we prepare the bankruptcy petition. We have our clients review all of the paperwork before we file it to let us know if something was inadvertently left out. We send a letter to the clients explaining that they must be truthful in their answers. And, at the time we meet with the trustee, we remind our clients that if there was anything they failed to tell us, they should tell us right then.
Mistakes can happen to anyone. But when you consult with an attorney, be it us at Steidl and Steinberg or anyone else, be prepared to tell us everything. Because the best way for us to protect everything for you is for us to know everything.