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Bankruptcy Filer Sentenced to Jail Time and Restitution Payments for Hiding Assets

October 26, 2010

As Highland consumer bankruptcy attorneys, we were interested to see a rare article about an individual who was caught lying about his assets during a bankruptcy. News station KRQE in Albuquerque reported Oct. 21 on a man who was sentenced to 30 days in jail for failing to report two homes and a car he owned in his Chapter 7 bankruptcy. Csaba Percifull, 28, is a naturalized U.S. citizen who was born in Romania. He pleaded guilty in federal court to violating the U.S. Bankruptcy Code by hiding a total of $54,000 in assets during his bankruptcy. He will serve 30 days in jail, followed by three months of house arrest and monitoring. He will also be required to pay an additional $17,000 in restitution to his creditors.

The article says Percifull owed $127,000 in debts when he filed for bankruptcy in 2005, most of it on credit. In a Chapter 7 bankruptcy, a trustee balances the filer's debts against his or her assets, which include all types of property owned but exempts a primary home, wedding rings and other personal items. The article did not note Percifull's total assets, but did say that he hid assets including two rental homes used as investments, two water-purification systems and a Jeep. He admitted in federal court to shipping the Jeep to Romania and deeding both homes to a former girlfriend. The girlfriend deeded back one of the homes when Percifull emerged from bankruptcy in 2006. The U.S. Attorney's office for New Mexico said in a statement that Percifull's actions threatened the integrity of the bankruptcy system.

Our Rialto personal bankruptcy lawyers agree. In Chapter 7 bankruptcy, filers sell off all their non-exempt assets in order to pay off their debts. The debts that remain after this process are discharged (forgiven) by the court so that the filers can start fresh. Filers who hide assets are cheating the court and, in a sense, stealing from their creditors. They are also likely to get caught, as Percifull was, and there are serious consequences. Hiding assets is a form of perjury, and filers can be charged with perjury or fraud. Anyone who knowingly helps by accepting the asset, such as Percifull's ex-girlfriend, could also be prosecuted. If filers are caught during the bankruptcy case, the case can be dismissed with prejudice, which means it can't be re-filed. That is, filers will be unable to file for bankruptcy again, and will have to deal with their creditors and likely pay in full. And filers who hide assets are likely to lose those assets if they are caught.

The best way to hold on to an asset during bankruptcy is to disclose it and enlist the help of Howard Law PC. Our experienced Orange County individual bankruptcy attorneys know how to give clients their best shot at retaining assets legally, using U.S. bankruptcy law and California bankruptcy exemptions. We can also help clients ensure that they don't accidentally leave out assets or debts, which could come back to haunt them later. (Failing to list debts may seem like a kindness to the creditor, but it can deny you the protections of bankruptcy or even get the bankruptcy canceled.) And if a client does make an honest mistake, we can help him or her correct the mistake and avoid accusations of intentional fraud.

Howard Law offers free, confidential case evaluations, so you risk nothing by telling us about your situation and hearing about your legal options. To set up an appointment or learn more about us, call us toll-free at 1-800-872-5925 or send us a message online.