Filing for bankruptcy is a debt relief tool that many Americans have used and will continue to use in order to discharge or reorganize unmanageable and costly debt. And while there is absolutely no shame in filing for any type of bankruptcy, it is important that the filer discloses all financial information, as those who fail to accurately fill out all of the paperwork could end up facing fraud charges in federal court.
Recently NFL star Rick Sanford learned firsthand how important it is to make sure that a Chapter 7 bankruptcy filing is complete and honest, as he was sentenced to serve two years of probation and 100 days of community service for omitting an asset on his 2009 filing.
In addition to probation and community service he was also sentenced to 30 days of home confinement.
According to court papers, the 54-year-old's 2009 filing listed $2.8 million in debts and $2.1 million in assets, which included a $900,000 home, a time-share worth $105,000 and multiple vehicles. However, the filing failed to include Sanford's part-interest in a condominium that he owned in a ski resort town, and when that condominium sold he reportedly earned $70,000.
According to sources when the bankruptcy trustee questioned his assets, Sanford ended up withdrawing his petition.
In the end, for omitting the condominium, he ended up still being charged with bankruptcy fraud and was sentenced late last week.
When looking at this case it highlights the importance of making sure that everything is filled out correctly in any type of bankruptcy filing, and that all financial information related to assets and liabilities is properly accounted for.
Source: The Herald, "Ex-USC, Northwestern football player gets probation in fraud," Rachael Myers Lowe, 22 July 2011