The short answer is that you lose the exemption. Lesson learned: Bankruptcy in Michigan is a process of full disclosure and complete transparency.
As reported by Robin Miller of CBAR:
The Amendment of an Exemption may be denied for deliberate concealment, bad faith or prejudice, to wit:
Deliberate concealment of or failure to disclose an asset may justify denial of an exemption in that asset. An amendment to the debtor’s claimed exemptions may also be denied upon a showing of bad faith or prejudice to creditors or third parties.
Debtors’ failure to disclose John Deere tractor warranted denial of amended exemption:
The debtors’ failure to disclose, in their original schedules, a John Deere tractor purchased six years earlier for $12,000, and still worth at least $4,000, amounted to deliberate concealment and warranted denial of the debtors’ amended claim of exemption in the tractor. The debtors told their attorney only that they had a “mower,” and, while the attorney attempted to take responsibility for not inquiring further, the debtors knew what type of lawn tractor they owned and knew it was worth thousands of dollars.
Debtors did not fail to disclose tools:
The debtors’ failure to separately list tools valued between $1,600 and $3,000 in their original schedules was not deliberate concealment, and denial of the debtors’ amended exemption in the tools was not warranted, where the debtors could reasonably have believed that the tools were included in a disclosed category of miscellaneous household goods, no item over $400, with an aggregate value of $2,500. Moreover, there was no evidence that the Chapter 7 trustee asked the debtors, at the meeting of creditors, for a fuller explanation of the items in this category of assets.
In re Stone, 504 B.R. 908 (Bankr. C.D. Ill., Jan. 22, 2014)
(case no. 1:13-bk-80630) (Bankruptcy Judge Thomas L. Perkins)