Bankruptcy Fraud: What You Need to Know


Fraud can happen everywhere in any situation and bankruptcy case is not excused. If one is planning or already in the process of dealing with a bankruptcy case, it’s best to know what is bankruptcy fraud and its consequences.

Get to know the consequences and get warned about the price you’ll pay if you commit any type of bankruptcy fraud.

Bankruptcy fraud is considered a federal crime which happens when an individual intentionally commits acts deceiving the court or other acts violating court rules and protocols in relation to their bankruptcy case.

The bankruptcy trustee is the state body who is in charge of investigating bankruptcy fraud cases. And the one who has the authority to prosecute those who carry out an act of fraud is the Department of Justice.

Types of Bankruptcy Fraud

Concealing Assets

Not declaring assets is the most often committed type of bankruptcy fraud. An asset refers to anything you own of any value such as your real estate, car, jewelry and other personal possessions.
This is a crime because in order for your creditors to receive the compensation they are entitled to, they have the right to know all the property you own and your capability to pay your outstanding debts.

Usually concealing assets is done by transferring it under the name of friends or family. Yet, sometimes it is just caused by an honest mistake -- you may only forget to list a specific asset. So better be diligent and review paperworks before submitting it to the trustee.

False or Incomplete Form Information

Speaking of diligence, first do not ever leave an empty space with your case’s paperworks especially during the filing to the court. Secondly, do not write false information on the forms provided. So if you are filling out a form requiring your current financial status or debts, see to it that you’ve provided complete and factual details.

If you ever commit such crime, there is a higher possibility that your eligibility for bankruptcy is denied.

Bribing and attempted bribery

Bribery in its general nature is already a crime. And in bankruptcy, it is often committed by bribing the bankruptcy trustee to approve the case through money offers or other personal favors such as treating the trustee to a meal.

From the very first place, you should maintain a professional relationship when dealing with the bankruptcy trustee who handles your case.

Multiple Filings
Yes, you are allowed to file for bankruptcy multiple times, but only if within the required time by the court. Say for example,you can only file Chapter 7 bankruptcy again after eight years since your previous Chapter 7 discharge.

But if you fail to follow protocols and files multiple time in different states using the same name and other information, or providing false details, it is already classified as a bankruptcy fraud.

Petition Mills

This type of bankruptcy fraud is committed by a third party who offers help to a tenant to avoid rejection. By then, the perpetrator gathers all the financial information of the tenant, files a bankruptcy petition after and asking fees destroying the tenant’s credit record.

When you file for bankruptcy, don’t even try to involve any of those bankruptcy fraud if you want a smooth-sailing relationship with the court. Be honest with every document and details you provide and make sure to review every bit of it.

To be properly guided and to avoid major mistakes when filing your bankruptcy case, hire the most trusted and experienced bankruptcy lawyer Frederickburg VA. Visit The Andrews Law Group at 6316 Five Mile Center, Suite #300, Fredericksburg, VA 22407, United States or you may contact 540.785.0010.

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