When Should a Person Disclose Their Assets for a Background Check?

There are several reasons that a person or company may need to disclose assets for a background check. The most common incidences are when a couple is facing divorce or child support obligations. In many cases, individuals will claim fewer assets so that they will have to pay lower payments. On the other hand, an individual may claim that they don’t have an income or possess any assets so that they can collect more money.

Another reason that someone may have to disclose their assets is if they are filing bankruptcy. The bankruptcy code requires that a debtor must disclose all of their assets.

Ways That People Try To Hide Assets

There are many ways that people try to hide their assets. They can go to great lengths of trouble and can sometimes be quite clever. It is a more common practice than most people realize. Hiding assets is a bad idea and can get a person in legal trouble. Here are the most common ways that assets are hidden:

• multiple bank accounts
• offshore accounts
• corporations
• stocks & bonds
• gifts
• mortgages
• safety deposit boxes
• employers
• cars, boats, and planes
• transferring of assets
• hiding of businesses
• real estate
• life insurance
• employment

Failure to Disclose Assets

Even though there is a slight chance that someone could get away with hiding assets, they should never take the chance. In doing so, they are taking a huge risk and could face civil or criminal charges.

During a divorce, there is a legal process called “discovery.” This step gathers information from each individual and third parties. Information collected can come from employers, banks, companies, and 401(k) plan administrators, among others. During the discovery phase, all financial information needs to be divulged. Lying during discovery or the deposition is perjury and can be a punishable crime.

Failing to report assets that have been requested by the courts can also lead to consequences. By defying the court order and not handing over all information, the individual can be held in contempt and face jail time.

In addition to legal ramifications, an individual who lies and tries to hide assets can lose their rights under existing contracts, such as a prenuptial agreement. If one of the partners has lied about their current assets, the judge presiding over the case can void a portion of or all of the prenuptial agreement.

Asset Investigations

Asset searches can be useful for many reasons. Most assets during a divorce are shared and include bank accounts and physical assets. However, for businesses, their assets may include trademarks, patents, and copyrights. Below are the most common reasons why assets need to be disclosed.

Divorce

Every state has its own set of laws regarding divorce, but they usually either fall under Community Property or Equitable Distribution. In both cases, all assets need to be disclosed so that both parties receive their entitled share.

Pre-lawsuit Research

Knowing a party’s assets can be helpful before filing a lawsuit. Results obtained from the pre-lawsuit research can help to decide to file litigation or not. Having a clear understanding of a party’s assets beforehand will determine if filing a lawsuit will be worth the time and effort.

Business Ventures

When businesses decide to join in on a joint venture, it is important to know what each company is bringing to the table. Knowing the company’s financial stability and their assets can be the final decision-maker. Also, it is important to know if either company is dealing with a civil or criminal suit.

Background checks can uncover:

• Bank account information
• Real estate
• Bankruptcy filings
• Judgments
• Corporate filings
• Aircraft, watercraft and motor vehicle registrations and liens
• Federal liens
• State liens
• UCC Filings
• Trademarks
• Patents
• Copyrights

We Can Find You Answers

At Affordable Background Checks, we can provide a professional asset check at an affordable rate. We believe that everyone should have the right to perform necessary background checks and shouldn’t have to pay high fees to do so. Whether you are in the midst of a divorce or thinking about investing in a business venture, we can help. We can run a complete background check that will uncover discrepancies and find hidden assets, liens, and court filings. Call us today for a consultation.

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