What is Bankruptcy Fraud
The average person filing for bankruptcy has no intention of committing fraud. He or she is just looking for a way to get out from under their debt and are desperate to bring the creditor and collector harassment to an end.
People file because they are concerned about losing their homes or vehicles, or having money from their bank accounts taken by creditors. They have no intention of defrauding anyone and their intention is to only make their situation better.
Unfortunately, having the best intentions won’t save you from being accused of bankruptcy fraud. Even if you “accidentally” commit fraud, your bankruptcy can be denied and you can face additional consequences.
Knowing what to do, and what not what to do, is an important part of filing for bankruptcy. It’s one of the reasons people choose to work with bankruptcy attorneys. The expert guidance you receive can help you avoid accusations of bankruptcy fraud.
What You Need to Know about Bankruptcy Fraud
- It Doesn’t Matter If Fraud is Intentional or Unintentional. It’s understandable why someone who intentionally misleads the bankruptcy court would face charges of fraud. But someone who unintentionally makes a mistake can face the same charges of fraud.Even if you honestly forget to list assets or make another honest error when you file, you can still face charges of bankruptcy fraud.
- Concealed Assets are the Most Common Type of Fraud. The court knows that most people who intentionally commit bankruptcy fraud do so by hiding assets. And one of the most common methods for doing so is by transferring assets to a friend or family member, thinking they’ll no longer be linked to your estate.If the bankruptcy court finds out about these assets, they’ll not only confiscate them they’ll charge you with fraud. Some people who have no intention of committing fraud assume it is fine to give their assets away to loved ones before filing for bankruptcy. Their intentions might not be nefarious or sneaky – but they can still get into trouble. Not to mention the embarrassment of having the court take something from someone you care about after you’ve given it to them.You can read more about transferring assets before filing for bankruptcy in this article from Pocket Sense. Your best bet is to speak to an attorney about your specific situation before doing anything with your assets if you’re considering bankruptcy.
- Trustees Can Act on Suspicion Alone. If the trustee handling your case so much as suspects there might be something untoward happening they can report their suspicions to law enforcement. The trustee doesn’t need proof.Of course, proof will be needed to bring criminal charges against you, but a great deal of damage can be done to your bankruptcy case even if there are never any criminal charges filed against you.Imagine yourself desperate to deal with a financial crisis and in doing so, you end up fighting accusations of fraud. It’s the last thing you need right now. You need to do everything in your power – and ask experts familiar with filing for bankruptcy to help you – to avoid any suspicion of fraud.
- Fraud Charges are Federal Charges. If the trustee overseeing your case reports you for fraud your case will pass to the Office of the US Trustee and then onto the US Attorney or the FBI to be investigated. If authorities believe there is a case against you there will be federal charges filed and if they’re able to prove their case, you’ll face up to five years in prison. This is in addition to the fines that will be levied against you and the permanent mark on your criminal record.You should never assume that everything will be fine if you are accused of bankruptcy fraud even if you didn’t do anything to intentionally defraud anyone. Fraud is a very serious crime and you need to take action before you file for bankruptcy to avoid even the slightest suspicion of wrongdoing.
- Guidance from an Attorney Can Help You Avoid Fraud. Working with an attorney doesn’t guarantee you won’t face accusations of fraud if you intentionally hide assets. However, the guidance of an attorney can help you avoid accidentally doing something fraudulent. If you’d like more information or you’re ready to file for bankruptcy and you want it to go as smoothly as possible, contact the Law Office of Robert M. Geller at (813) 254-5696.