My ex husband/wife filed bankruptcy, and I know that they’re hiding assets from the trustee. What do I do?

If your ex husband/wife or someone you know has filed bankruptcy and is actively hiding assets, then you should probably tell the bankruptcy trustee.

Just remember to be careful, because by doing so, you are accusing them of committing a fraud on the court, of committing perjury on their federal bankruptcy court documents, and this is a pretty serious charge.  It is not something to be done lightly.  The trustee will generally keep you anonymous, but not always.  There is a good chance that the debtor will know that you turned them in.

Today, I was in court when the ex-wife of one of the debtors showed up to speak with the trustee.  Unfortunately, she was an hour late, and she missed his 341 Meeting of Creditors.  She wanted to talk to the trustee, advise him that her ex husband was behind on child support, and tell the trustee that her ex husband had two four wheelers and a 14′ trailer that he had transferred into his brother’s name right before filing bankruptcy.

I advised her to write a letter to the trustee detailing the hidden assets and stating her claim (she had been properly listed in the bk as a priority creditor).  I told her that the trustee would follow-up, and if there were fraudulent transfers of assets, he might go after those transfers, get the items back, and sell them to pay creditors of the estate.

I don’t know if she did or not, but let’s say she was telling the truth.  Then the trustee would contact her attorney and/or run a TLR search (title search) showing that the debtor did, in fact, have those 3 vehicles.  The trustee would then demand that they be turned over to an auctioneer, and he may even turn in the debtor to the U.S. Trustee’s office for a criminal investigation.  After those vehicles sold at auction, the trustee would use those funds to pay off creditors of the estate, starting with priority creditors like the child support owed to the ex-wife.

Leave a Reply