From a press release last week from the Madison division of the FBI.
Bonnie Block of Lancaster was sentenced to two years probation and a $1,000 fine for failing to disclose $10,750 she held in a bank account on the date her bankruptcy case was filed and for lying about how she spent the money when questioned about it.
Two years probation and a $1,000 fine, by the way, was hardly the maximum that she could have faced for her crime. She could have been imprisoned for up to 5 years, and the fine could have been a lot more.
The bankruptcy court denied her discharge. Additionally (the press release doesn’t detail this, but I have it on good authority from a former trustee in that district), she ended up having to turn over the hidden funds.
Now, I can’t speak as to the totality of the exemption math in her case. But it is likely that she would have been able to protect almost half of that money if she had disclosed it and used state exemptions. (Federal exemptions may well have protected even more.) Or she could have gone the Chapter 13 route. Instead, she lost the entire amount, attorney fees for representation in the bankruptcy, attorney fees for representation in the criminal proceedings, her discharge, the fine, plus the criminal mark on her record.
Lesson of the story: no matter how bad you think something might be in bankruptcy, lying and getting caught is going to be MUCH WORSE. Always be honest with your attorney and disclose all of your income and assets.