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You can hide and sell, but you can’t run

Hiding or selling your assets to avoid paying creditors once you’ve filed for bankruptcy is against the law. Signing over your car to your uncle, having a friend put all your jewelry in a safe deposit box, or selling your valuable artwork or furniture after they’ve been frozen will not buy you any favors with the bankruptcy court.

Former New York Mets outfielder and eventual stock broker Lenny Dykstra learned that the hard way. Our readers in New Jersey probably recall that Dykstra is already serving three years for a previous conviction of a car finance scam, lewd conduct and assault with a deadly weapon. But earlier this week he entered into a plea deal for embezzlement. According to the FBI, he allegedly looted his mansion of his old sports memorabilia and home fixtures, then sold or destroyed them.

The items were already frozen as part of his bankruptcy estate case to repay creditors. His actions amounted to embezzlement and fraud. In 2009, Dykstra turned to bankruptcy to try and save his home that he purchased from hockey star Wayne Gretzky. Unfortunately, however, his home was sold in 2010 to one of Dykstra’s creditors.

Allegedly, he arranged for several household items including artwork, chandeliers, a stove and grandfather clock to be delivered to a consignment store. Federal investigators say he also destroyed or hid other estate assets to the combined tune of $400,000.

Don’t take the law into your own hands. Working with a bankruptcy lawyer will help you end harassing phone calls and any wage garnishments, let you keep your house, distinguish between the truths and myths of bankruptcy, and help you get the fresh start you deserve.

Source: Los Angeles Times, “Lenny Dykstra takes plea deal on bankruptcy fraud charges,” Richard Winton, June 28, 2012

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