Bankruptcy fraud is a serious federal offense that can cost you more than
just your personal possessions but time in prison. There are various ways
debtors try to deceive the court from learning more about personal finances.
Many consumers may not realize that by doing one act alone such as concealing
an asset can have you facing charges for fraud. To help further explain
the significance of bankruptcy fraud, consider the following points.
There are 4 forms of bankruptcy fraud that include concealment of assets,
false or incomplete filed documents, multiple filings under false names
and bribing court appointed trustees.
Roughly 70 percent of fraud cases involve concealing assets. This can be
done in different ways but a common form includes transferring titles
to family members or friends.
Unauthorized agencies that are known as petition mills. They are another
form of bankruptcy fraud as they act as a consulting service to help cash-strapped
consumers from being foreclosed, evicted or have further legal action
taken against them. Such agencies claim to file bankruptcy for you and
then they pull out and disappear from the case; leaving debtors out of
money while charging exorbitant fees.
Filing bankruptcy in multiple states is also fraud, but debtors that do
this may use real or false personal information when filing forms. Some
do this to buy more time to conceal assets.
As a federal offense it is punishable up to 5 years in prison with a $250,000
fine in some cases. Probation is another option depending on the outcome,
but you may end up being responsible for debt obligations that were intended
for discharge or elimination.