Rapper and occasional actor 50 Cent has been in the news recently. 50 Cent declared bankruptcy in New York. He was on the losing end of a civil lawsuit and chose to file for bankruptcy to restructure his debts.
50 Cent is big on the social media. He was recently hauled before the United States Bankruptcy Court to explain recent social media posts. These Instagram posts showed the rapper posing with large amounts of cash. Why is that a problem? 50 Cent did not declare a large amount of cash on his bankruptcy paperwork. Hiding assets from the bankruptcy court is a very big deal.
Complete Disclosure is Required in the Bankruptcy Court
Bankruptcy filers owe the court and creditors an absolute duty of full disclosure. A typical consumer Chapter 7 bankruptcy petition consists of over 60 pages of documents. These documents require disclosure of assets, creditors, and income information. Answers to numerous questions about the debtor’s financial affairs are also required.
All bankruptcy documents are signed under penalty of perjury. People that lie on the bankruptcy forms or attempt to hide assets can find themselves being investigated by the FBI. Lying or hiding things during the bankruptcy process is a federal felony.
Simply forgetting something isn’t an excuse. In most cases, bankruptcy filers are in control of the timing of their bankruptcy. My office works closely with debtors to ensure the accuracy of their paperwork before it is sent to the court. Extra diligence prior to filing pays dividends during the bankruptcy process.
How to Avoid Trouble
Currently I do not ask debtors whether they have a large stack of money sitting on their bedroom floor. Maybe I should start. Typical assets that are easy to forget about include:
- Assets that belong to you but are in the possession of another person.
- Intangible assets such as lawsuits, potential lawsuits, pending bonuses, and tax refunds.
- Security deposits paid to landlord at the beginning of a tenancy.
- Savings bonds.
- Pre-paid debit cards.
- Seldom-used bank accounts.
When declaring bankruptcy, make sure to take the time to answer all of the required questions carefully. I help people in the Sacramento Area successfully get through the bankruptcy process. Please call (916) 333-2222 to discuss your bankruptcy options.
