Never Lie in a Bankruptcy Case – 5 Reasons Why Honesty is the Only Way to Go Skip to main content

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Never Lie in a Bankruptcy Case—5 Reasons Why Honesty is the Only Way to Go


Don't tell lies

Never lie in bankruptcy - here's why

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Most people tell an occasional lie—whether it’s a little white lie like, “No, you don’t look fat in those jeans” or something a bit more serious like claiming you have the flu when you’d rather go see the new Star Trek movie than go into the office. Many people also don’t sweat it over small irregularities on their tax forms like bumping up their charitable contributions by $100 or so. But lying to the bankruptcy court? That’s just asking for it. Here’s five reasons why you should NEVER lie during bankruptcy.

#1 You Can Go to Jail

While it’s not a usual practice for someone who tells a small fib on their bankruptcy filing to go to jail, realistically it could happen from any scale of lie. When you sign your bankruptcy documents, you are swearing to the federal government that the info is honest. You will also swear again in court. Dance Mom’s Abby Lee Miller is facing jail time for bankruptcy dishonesty, and the Giudices from The Real Housewives of New Jersey had to pay the piper behind bars as well. It can happen—so don’t lie.

#2 You Can be Stuck With All Your Debts and No Way Out

You must also consider that bankruptcy trustees, lawyers, and judges are experts in their field. You are not. By trying to lie to these professionals, you are setting yourself up for failure. A tiny lie might not be caught, but a tiny lie also won’t help you much. A larger lie can result in being stuck with your debt, your creditors can still come after you, and you’ll lose a big chance to be debt-free under bankruptcy law. Bankruptcy is a huge opportunity—don’t foul it up with needless lies in case you get burned.

#3 You Can Lose Your Personal Property

North Carolina offers healthy exemptions to shield a normal amount of assets. Up to $35k in home equity can be protected in an individual filing and $70k in a joint filing of spouses. You can generally protect your vehicle, clothing, furniture, computers, and other items. If you have a stockpile of art, jewels, or fur coats, though, and you fib to the court, the trustee could seize and sell your assets to satisfy your debts. Don’t cheat the system that’s there to protect you.

#4 Your Bankruptcy Discharge Can be Revoked

You may lie to the bankruptcy court, get a discharge, and think you’re in good shape. Nope! If something comes to the attention of the court, they can reopen your case, revoke your discharge, and all your creditors can come after you because it will be open season once again. That’s what happened to Dance Mom’s Miller—her bankruptcy judge saw her TV show, reopened her Chapter 11 bankruptcy case, discovered she had hidden income, and now she’s in the hot seat. 

#5 You Can Lose Out On Future Bankruptcy

If you lied on a bankruptcy case and the case was thrown out of court, you might be able to file bankruptcy again later. However, the Trustee or judge assigned to your subsequent case could carve out debt from the prior case and declare it ineligible for discharge based on your former fibs. You just never know the ripple effects from lying about bankruptcy and how it can affect your future, your debt, and your finances.

The bottom line is that bankruptcy offers significant debt relief, and North Carolina bankruptcy exemptions allow you to protect a reasonable amount of assets. There’s no need to lie and try to skirt the law. If you feel like you have to lie about your income or assets, then there are likely better solutions to deal with your debt.

To find out more about the benefits of North Carolina bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free appointment at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington to talk about your debt. 

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