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Friday, August 2, 2013

Honesty is the Only Policy When it Comes to Filing Bankruptcy

It is important that when you discuss your financial situation with your bankruptcy attorney that you are completely honest with him or her. We have seen that over the past year the number of bankruptcy filings has increased. As a result many of bankruptcy trustees are more closely scrutinizing the filings and referring them to the Department of Justice if they believe that any fraud is involved.

For example, we recently had a client who inadvertently failed to list all of her income. The income that she failed to disclose consisted of cash payments made to her for intermittent office related tasks. Once the petition was filed a 341 meeting was scheduled and during the meeting the trustee questioned our client as to whether she had listed all of her income accurately. At that point she realized that she had forgotten to tell us about the cash payments and advised the trustee of the omission. After leaving the hearing we received notice from the United States Department of Justice that our client was being investigated for fraud in connection with her bankruptcy filing. Fortunately for our client we were able to convince the Department of Justice that the omission was purely in error and that there was no intent to deceive the trustee or the court. Ultimately, our client received a full discharge in her bankruptcy proceeding and has since gone on to rebuild her credit.

While our client’s situation was successfully resolved, it is extremely important to understand that when you provide information to your bankruptcy attorney that the information must be accurate. You do not want to be the target of the Department of Justice investigation concerning inconsistencies in either your assets or your debts.

If you would like more information about this topic or if you wish to discuss a legal matter with us, please do not hesitate to contact me at 973-949-3770 or via email at plamont@peterlamontesq.com. We answer legal questions on a daily basis and would be happy to discuss your matter with you.

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