What should I do if accused of lying in bankruptcy court?

 

What to Do If Accused of Lying in Bankruptcy Court

Being accused of lying in bankruptcy court can be scary. It feels like your whole world is crashing down. But don’t panic. With the right legal help, you can get through this.

First, take a deep breath. I know it’s easier said than done. But freaking out won’t help anything. Try to stay calm and think clearly about your next steps.

Get a Lawyer

If you don’t already have a bankruptcy lawyer, now’s the time to get one. Choose someone with experience in these types of cases. Your lawyer will advise you on the best legal strategies.

Be upfront with your lawyer about what happened. Explain everything, even if it’s embarrassing. They need all the facts to build the strongest defense. What you tell your lawyer is confidential, protected under attorney-client privilege.

Don’t Talk to Anyone Else

Other than your lawyer, don’t discuss the case with anyone – not even family or close friends. Anything you say could potentially be used against you. Your lawyer will tell you if it’s okay to talk to certain people.

Review the Accusation

Find out exactly what you’re being accused of lying about. Get a copy of the complaint or motion from your lawyer. Understand what evidence they have against you. That will help shape your defense strategy.

Some common accusations include:

• Hiding assets or income
• Lying about debts or expenses
• Misrepresenting facts on your bankruptcy petition
• Concealing fraudulent transfers of assets

Gather Evidence

Work with your lawyer to pull together documents and records that support your side of the story. This may include:

• Bank and credit card statements
• Titles, deeds, tax returns
• Receipts for expenses
• Emails and letters related to assets/debts

Also make a list of potential witnesses who can back up your claims. Your lawyer may want to interview them.

Consider Possible Defenses

There are a few legal defenses that could get the accusations dismissed or reduced. Common defenses in bankruptcy fraud cases include:

Honest Mistake

Argue any misstatements were honest mistakes, not intentional lies. For example, you forgot about an old bank account or miscalculated expenses. This can work if mistakes were minor and not deliberate.

Reliance on Attorney Advice

Claim your lawyer knew the full facts and should have properly advised you on required disclosures. This shifts blame to your attorney’s alleged incompetence.

No Intent

Prove you had no intent to defraud creditors or the court. This means showing you gained no real benefit from alleged lies or concealment. It also requires showing no harm was done to creditors.

No Materiality

Argue the alleged lies were not material – meaning they were unimportant and did not influence the bankruptcy case. Lies must be material to be considered fraud.

Your lawyer will assess which defenses could apply in your specific situation.

Try to Settle

In some cases, the bankruptcy trustee or creditors might be open to settling. This avoids a lengthy court battle. Settlement terms may include paying back some debt or forfeiting certain assets.

Your lawyer can negotiate with the other parties and present a settlement offer to the court. But the other side has to agree for it to happen.

Prepare for Trial

If no settlement is reached, your case will go to trial. Your lawyer will handle pretrial activities like:

• Filing motions to dismiss certain claims or evidence
• Taking depositions from witnesses
• Serving discovery requests to access the prosecutor’s evidence
• Filing trial briefs outlining your defenses

During the trial, your lawyer will cross-examine witnesses, present evidence, and deliver arguments to undermine the prosecution’s case. You may have to testify in your own defense.

The judge will decide if the evidence proves beyond a reasonable doubt you intentionally lied or concealed information. If not, you should be found not guilty.

Know the Consequences If Convicted

If the judge rules against you, possible penalties include:

• Denial of discharge – your debts won’t be forgiven
• Dismissal of your bankruptcy case
• Loss of certain assets or exemptions
• Criminal charges for bankruptcy fraud

Jail time is rare but can happen for serious offenses. Fines up to $500,000 are also possible. And you might be barred from filing bankruptcy again for several years.

Don’t Lose Hope

It’s scary being accused of bankruptcy fraud. The legal process feels overwhelming. But with an experienced lawyer guiding you, there are ways to defend yourself. Be honest, gather evidence, and keep an open mind about settlement. This storm will eventually pass.

Stay strong and know you have people in your corner. We’ll help you get through this one step at a time.

Sources:

U.S. Courts – Bankruptcy Fraud & Abuse

Justia – Bankruptcy Fraud and Abuse

Nolo – Consequences of Bankruptcy Fraud

Cornell Law School – Bankruptcy Fraud