If you’re thinking of declaring bankruptcy, make sure you follow the proper procedures beforehand. In reality, adopting the proper precautions can help you stay away from fraud and typical blunders. What you need to know is as follows:
What Is Bankruptcy Fraud, First?
Fraud in bankruptcy cases may be accidental or deliberate. You might experience severe repercussions if you are proven to have been dishonest before or during the bankruptcy procedure.
A federal grand jury recently indicted a Pennsylvania debtor for hiding assets throughout the bankruptcy process. This debtor hid an enormous fortune. The maximum term for the debtor, if proven guilty, is five years in jail. Therefore, it is crucial to be completely honest with your lawyer about your financial situation both before and throughout the bankruptcy procedure.
What Sort of Fraud Is Allowable Prior to Bankruptcy?
The following scenarios can include pre-bankruptcy fraudulent activities. A creditor could urge the court to reject your discharge of a specific debt in any of these scenarios. This will imply that you will continue to owe it once your lawsuit is over.
- using false information to secure a loan or credit by lying about one’s income or assets
- fabricating or lying in financial papers
- using credit without intending to pay it back.
- intentionally writing a bogus check
- Investing on luxuries before filing
- obtaining substantial financial advances prior to filing
- Using dishonest business methods
Remember that all of the aforementioned things are avoidable and may be handled with your lawyer. Any fraud accusation will be thoroughly investigated by your bankruptcy trustee.
Which Forms of Fraud Are Possible During Bankruptcy?
By collaborating with your lawyer, you can prevent the following occurrences throughout your bankruptcy. Examples like the ones below will be viewed as a concern and result in a fraud accusation:
- Leaving out a property to avoid its sale during bankruptcy
- Keeping a property transfer secret (Click here for additional bankruptcy mistakes to avoid)
- Present fictitious information to your trustee or the court.
- document withholding or destruction
- Hiding assets from the court or hiring someone to assist in hiding assets
- Making deliberate misleading assertions in documentation or hearings
Bankruptcy fraud can be prevented.
Being upfront and honest with the court and your attorney can help you stay out of trouble. Usually, bankruptcy fraud is done on purpose. You probably won’t be found guilty of fraud if you omit to report a cost or asset. If you discover something you neglected to provide, your lawyer can assist you in changing your case. Contrarily, deliberately concealing an asset, submitting a fake form, or making a dishonest statement are all quite different.
Do You Need More Details?
Before making any changes to your financial status if you are considering filing for bankruptcy, you should see an attorney. A consultation may save you hundreds of dollars and is typically free. You owe it to yourself to have a new beginning!
If you live in or near Los Angeles or Texas, Recovery Law Group is a reputable company that can assist you with all of your bankruptcy-related problems. You can reach them by calling (888) 297-6203 or visiting their website at https://recoverylawgroup.com/.