How a Bankruptcy Trustee Can Find Hidden Assets

Related Ads

The main objective in a bankruptcy proceeding is for every creditor to get his fair and equitable share in the debtor's assets. Toward this end, the bankruptcy trustee is obligated by law to do his best to ensure that no creditors get special treatment or that the debtor has not hidden any assets. If the debtor is given an automatic stay against creditors, it is only fair to put all of his assets under the estate so that they can be used to pay off long, overdue debts.

Hiding Assets

It is understandable for debtors to try to hide some of their assets so that they do not become part of the bankruptcy estate. Some of the ways that debtors can hide assets include giving them away as gifts, withdrawing money from one account and transferring it to a friend or relative's account. Some debtors would like to keep assets away from the trustee so that they still have something after the proceeding is concluded. To find hidden assets is something where a bankruptcy trustee is good at.

Trustee's Role

The trustee is, however, empowered by law to recover or find hidden assets that he believes have been purposely put of the court's reach. Debtors should not underestimate the bankruptcy court's reach. Assets that have been diverted with the intention of being hidden can be recovered and made part of the estate. Transactions that are made a few days before the filing are recoverable.

Recovering Assets

The trustee can recover assets after reviewing the debtor's court filings, and the schedules of assets and liabilities. He can file motions for recovery of assets, and even payments, that the trustee deems should become part of the estate. Payments to certain creditors prior to filing will be examined and may be recovered in case they show elements of favoritism. Creditors have to be paid in accordance to security and priority.

Getting Legal Advice

A bankruptcy proceeding is complex and time-consuming. If you have an interest in a case, hire an expert bankruptcy lawyer so that you are able to recover your assets. Your lawyer can also help find assets that may or may have been intentionally hidden.

If you are a debtor, you should consult your bankruptcy lawyer if the transactions you have done in the past few weeks prior to filing can be considered as hiding of assets, and you can do to avoid this situation.

NOLODRUPAL-web1:DRU1.6.12.2.20161011.41205