Bankruptcy fraud can be committed in a number of ways, and the penalty it carries is harsh. Debtors found guilty of fraud can face up to 20 years in prison. They may also be fined for up to $250,000. This alone should be enough to deter anyone from attempting it, but some debtors who are especially attached to their properties or who are unable to cope with the idea of paying all of their disposable income to their creditors for the next 3-5 years become overwhelmed and choose to act irrationally.
Knowing the details and risks of fraud is one of the ways to prevent debtors from making this grave mistake. If you’re unsure about filling out your bankruptcy paperwork, then it would be wise to consult a bankruptcy lawyer who can advise you. A bankruptcy lawyer will have the skill and experience to help you navigate your paperwork properly so that you won’t forget to list any properties or any other required information.
For more information on what constitutes bankruptcy fraud and how to avoid it when filing for your bankruptcy, read on.
What Makes Bankruptcy Fraud so Serious?
It is important to recognize, whether you have malicious intentions or not when filing, that declaring bankruptcy can leave your creditors at a severe loss. They will not be reimbursed for whatever outstanding debts you owe to them. If you try to commit fraud, you’re effectively stealing money straight from your creditors.
Types of Fraud
While “bankruptcy fraud” is just one offense, it can be committed in a few ways.
Debtors who attempt to conceal their assets are guilty of fraud. In this case, fraudulent debtors typically leave some of their assets off of their paperwork, meaning that the trustee assigned to liquidate their assets will not be aware of them.
Some debtors will transfer ownership of certain items to friends or relatives once they know they’ll be filing in an attempt to protect those assets. This is also a form of fraud and is punishable if discovered.
Other debtors will attempt to bribe the trustee appointed to liquidate their assets in an attempt to preserve some property.
Get Help from a Bankruptcy Lawyer and Avoid Fraud
While intent must be proven in order to convict someone of bankruptcy fraud, it is still possible to misrepresent yourself or your assets by accident. While this is unlikely, it is smart to seek the advice of a bankruptcy lawyer who can guide you through your bankruptcy process. With a bankruptcy lawyer by your side, you can be assured that you will not only avoid fraud, but you will also be ushered through your bankruptcy process as smoothly as possible.
Avoid the hassle and risks of filing for bankruptcy alone: call a bankruptcy lawyer at Groce & DeArmon, P.C. today. You can reach us at 417-862-3706.