Spouses Who Hide Assets Or Income During Divorce Face Big Financial And Criminal Consequences
During divorce a common complaint is that a spouse is hiding income or other assets, to keep from having to share these assets during the property division. A common reaction by the spouse who is served divorce papers is that the spouse leaving the marriage should not be entitled to certain property or income. The law disagrees in this area, and during divorce proceedings the entire truth must be told or there could be serious consequences.
A spouse who hides income or assets from the court during a divorce case can face steep financial penalties, but the problems do not end there. Because the information provided to the court requires you to swear that it is truthful and accurate you face perjury penalties if you lie. This means knowingly omitting certain information from the required documents and forms filed during the divorce process.
Any spouse who attempts to hide income or assets during their divorce case could face jail time as well as a financial penalty that may be imposed for these actions. There are two main types of property division and distribution during divorce, community property and equitable distribution. Community property division means that all property considered marital property will be divided evenly between the parties. Equitable distribution follows the principle that the assets and income are distributed fairly but this may not mean an equal division.
Each state will use one of the two property division types available for divorce cases, depending on the law in that specific state. Debt that is accrued out of criminal activity, such as financial penalties for hiding income or assets during a divorce, may not be discharged in bankruptcy in most cases.
When a spouse hides income or assets from the divorce court this can have a big impact on the case results. The income that each party to the divorce earns will help determine many factors. Child support, spousal support, how marital assets are divided, and even who is responsible for certain debts or mandatory payments may all be affected by the income that a spouse has.
Hidden income or assets by one spouse could cause the division of property, assets, debts, and financial responsibilities to be unequal and unfair when the divorce is finally settled. In many divorce cases previous tax returns will be requested by the court to determine the true income and assets that each spouse has.
There are benefits that a spouse may enjoy if assets or income is hidden, but the consequences of these actions if the spouse is caught can be very severe. Some judges who have uncovered these activities have decreed that the spouse hiding the income or property is not entitled to anything due to this behavior. In most cases the spouse is simply forced to pay a large fine or may have to spend a short time in the local jail. None of these outcomes is desirable, so make sure that all income and assets owned are reported during any divorce proceedings.