Because bankruptcy is a legal process that is intended to help consumers and businesses deal with the debt they are unable to pay, bankruptcy fraud is considered a federal crime. Being honest and fully disclosing information and details about your situation not only helps your bankruptcy attorney understand your financial background, it helps the court in determining the best outcome for your case. Providing false details may lead to paying a hefty fine, criminal charges and even imprisonment.
Bankruptcy fraud can be committed in different ways such as hiding or concealing assets, filing too many times during a short time period or making false statements in court. Withholding information about assets is the most common type of fraud. This may even include transferring of assets such as bank account funds or property title. With multiple filing there have been debtors known to file with assumed or fictitious names. They may occur in more than one state while failing to submit a complete list of assets in each filing.
Concerns about assets should be discussed with your bankruptcy attorney. Some may feel the need to hide certain assets when filing bankruptcy but the concept could make your case more complicated and lead to your case getting dismissed without a discharge. In many cases, you can still retain most if not all of your assets since bankruptcy provides several exemptions depending on which chapter is filed.
Working with an experienced legal counsel can help you understand your financial situation, review equity in detail, give clarity on what to expect during your bankruptcy case and ensure legal procedures are followed accordingly to avoid your case from being dismissed or, even worse, being accused of bankruptcy fraud.