Lenny Dykstra Case Shows Los Angeles Bankruptcy Risks

May 12, 2011

Former major league All-Star outfielder Lenny Dykstra was recently indicted on bankruptcy fraud charges, alleging that he sold items from his $18 million mansion in Ventura County, CNN reports.

Los Angeles Bankruptcy Attorneys work with people who are desperate to put an end to nagging creditor calls and get back on track. Successfully filing bankruptcy and following the laws in place can be highly beneficial to getting people out of debt. Indeed, it can be a new lease on life.
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But Bankruptcy fraud is a serious crime and in Dykstra's case, he faces 13 federal charges that could put him in prison for up to 80 years. Along with bankruptcy fraud, he is charged with obstruction of justice, concealing property from the bankruptcy estate, embezzlement and making false declarations to bankruptcy court.

Bankruptcy fraud most often occurs when someone is accused of trying to hide assets. When people file for bankruptcy in California, it means they have to be truthful about all of their assets. Trying to sell off assets outside of the proceedings can lead to criminal charges and serious prison time.

But the reverse is also a danger. If you don't list all of your debts, you could still be responsible for those debts and may not be able to seek bankruptcy protection for years after filing. In some cases, the failure to include assets is a simple oversight. Still, the government may come after you with criminal charges.

In Dykstra's case, the 48-year-old from Murrieta allegedly stripped his Thousand Oaks mansion and denied receiving money for having sold items that were owned by the bankruptcy estate. CNN reports that gold- and silver-plated door knobs, fixtures, furniture, artwork and sports memorabilia was taken and sold.

Californians have different options when considering bankruptcy. It's possible that Chapter 7 bankruptcy is better for you. It's also possible that Chapter 13 bankruptcy in California best suits your financial situation.

You should consult an experienced bankruptcy attorney in Encino, Glendale or Los Angeles to consider the options. Trust someone who has been helping people climb out of debt for more than a decade.

If you need to speak with a bankruptcy attorney in Los Angeles, Encino or Glendale, contact the Nader Law Firm at 1-800-568-0707 for a free consultation.