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What You Should Know about Bankruptcy Fraud

Posted By Allmand Law Firm, PLLC || 20-Feb-2014

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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.

Reference: http://www.law.cornell.edu/wex/bankruptcy_fraud

Categories: Bankruptcy Fraud
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