Full Disclosure: Tell The Truth to the Arizona Bankruptcy Courts

December 06, 2010 (Press-News.org) Do not lie to the Arizona Bankruptcy Court. Sound obvious? It would seem to be a statement that never needed to be said out loud, if it weren't for the frequency with which people filing for bankruptcy get swept into believing this is a good idea. Read about the role of the bankruptcy trustee to learn more.

Far too often, people with valuable business interests get the idea that these can be preserved in bankruptcy through a transfer to another person. Rather than disclosing an asset, they think they can just hand control over to a trusted loved one, and take it back after the bankruptcy is complete.

They might hear it from an attorney who doesn't focus in bankruptcy law, or it may come as a suggestion from a friend of family member. The problem, of course, is that this plan demands lying to the bankruptcy court. Also, it has another name: fraud.

When you are filing bankruptcy, you are required to disclose all of your assets and debts to the bankruptcy trustee. If you attempt to hide an asset or shield it from your creditors by transferring it to another person, you are committing a crime.

Beyond the fact that you might end up facing criminal charges, it simply doesn't work this way. Bankruptcy trustees searching for assets understand how such transfers work; they will investigate, and they will find your business interests. You cannot lie to the trustees and you cannot lie to the bankruptcy court.

When can you legitimately transfer a business interest to another person? That person must pay you the fair market value of the business, and you must actually receive the money. You can only use the money for necessary expenses, such as food or housing, and you should keep track of these expenses. You cannot make the transfer with bad intent and you must disclose the transfer - it must be listed on the bankruptcy schedules.

If you have questions about your bankruptcy or the best way to proceed with the process, don't try to figure it out alone. Speak with a knowledgeable bankruptcy attorney in Arizona, who can explain the best approach for your circumstances and help you work through the process.

Website: http://www.josephmcdaniel.com/Firm-Overview.shtml