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Hiding, diverting assets before bankruptcy can be a federal crime

When most people declare bankruptcy, it's after months of emotional and financial struggle. Many have tried to keep afloat by selling off retirement assets, not realizing that bankruptcy could have protected those assets. Most people try everything they can think of before bankruptcy.

That appears not to have been the case for an Arizona lawyer, his fiancée and his father. A federal grand jury recently indicted the attorney on 12 criminal counts including conspiracy, concealment, making false charges and fraudulent transfer of property; and indicted the dad and fiancée on conspiracy and other charges.

The lawyer is accused of filing personal and business bankruptcy while at the same time secretly buying million-dollar homes, a luxury car, and a $90,000 engagement ring. He also failed to disclose hundreds of thousands of dollars' worth of cash.

According to the Arizona Republic, the lawyer even bought a $1.1-million home just days before filing for bankruptcy. This was apparently done through a shell company set up by his father. The lawyer and his fiancée also engaged in large-scale real estate transactions while the man continued to claim bankruptcy protection. Moreover, he settled a $1.5 million loan from the Small Business Administration for only $450,000.

This is an unusual situation, and we don't expect to see our clients intentionally defraud the Bankruptcy Courts. Situations do come up, however, where people need debt relief even though they have substantial assets. The assets may be illiquid or unavailable, such as assets held in a trust, for example. Or, their debts may outweigh even large assets.

If you have assets you would like to keep but need to file bankruptcy, it's time to talk to an attorney about debt relief. We are happy to help you examine your total resources, determine which may be exempt from bankruptcy, and move forward in your best interest. There are options for saving your home, your retirement savings and even some non-exempt assets.

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