Top Four Types of Bankruptcy Fraud

There are generally sighs of relief when bankruptcy relief is filed. Debtors receive formal relief when the bankruptcy is filed and then granted by the federal bankruptcy court.

Families and individuals are no longer underwater in their home, credit card, medical and other debt and bills. Bill collectors stop calling and the stress of feeling that you’ll take the rest of your life paying off your bills is over.

But there are usually many questions about what should be spent and what can be perceived as bankruptcy fraud after the bankruptcy is filed.

4 Kinds of Bankruptcy Fraud

There are generally four ways that bankruptcy fraud can be committed. Bankruptcy fraud is often coupled with other financial crimes such as using false aliases, stolen identities, stolen credit card or social security numbers, filing bankruptcy in several states. Bankruptcy fraud is a simple white collar crime to commit. But intentionally defrauding the Federal Bankruptcy Court holds severe penalties with many years in prison.

Pleading ignorance will not alleviate the penalties because when you file bankruptcy the papers you are provided and which you’re required to sign state the many ways that bankruptcy fraud occurs no matter what state you file in or what chapter of bankruptcy you decide to file.

1. The number one form of bankruptcy fraud is intentionally hiding or concealing assets.

Giving family, friends or relatives property or assets in order to hide them is considered bankruptcy fraud and if you are caught, you can receive jail time. You may not leave out or omit assets. You may not give things away or loan them to escape being held accountable for your assets.

With computerized documentation it’s virtually impossible not to be caught if you are transferring, withdrawing or removing funds of any kind in any type of financial institution. Property that is titled or licensed is not able to be hidden. If it has your name on it in a computer, the bankruptcy trustee can track it down and trace it. The sleuthing abilities of bankruptcy trustees are backed by computer forensic specialists hired to track your property and any illegal activities or transferrances.

This includes property such as boats, homes, vehicles, land. It also includes financial transfer of funds of any kind to anyone. The transferring of assets before or during a bankruptcy no matter what chapter is filed is not allowed. You have to list, share, show, tell, explain, completely every asset that you own or expect to receive. You may not hand funds over to anyone else in order to hide them, keep them, regain them later, after the bankruptcy is completed.

2. Credit card fraud

You may not fill up a credit card with purchases after bankruptcy is filed, nor may you open a credit card, fill it with purchases and then file bankruptcy. If by any remote chance you believe that a spending spree is a good idea you are sorely mistaken. The bankruptcy trustee is an expert in spending and tracing and tracking what you spent and what you spent it on.

The only thing you should be using a credit card for should stop when you file bankruptcy. You either get a secured credit card to use for daily purchases, or regular bills to be paid online, or you pay cash. If you go out to the mall and spend up to your maximum credit limit on all your credit cards you will be required to pay them back and your request to file bankruptcy can be denied.

If you have any question as to what you can and cannot do or spend money on ask your Florida attorney.

3. Intentionally filing incomplete or incorrect forms.

You had better get crystal clear directions and ask yourFlorida bankruptcy attorney about any questions that you have about the forms that you are required to fill out and complete. If you don’t know what a question is asking, ask your lawyer. If you’re not sure which financial aspects you’re supposed to include then you need to ask your attorney to clarify it for you. No matter what you decide to write down it had better be the truth and you had better check it at least twice.

If you make a mistake you may not be able to defend what you see as a simple error. You are signing the papers stating that you completed the forms accurately and truthfully. If you make a mistake and it’s caught by the bankruptcy trustee you will have to rely on your attorney to get you out of it. If you answer falsely intentionally you can be caught and prosecuted for bankruptcy fraud.

4. Filing bankruptcy with false or real information in multiple states.

Using multiple identities, or singular identities to file bankruptcy in different states is illegal. Being charged with bankruptcy fraud is a criminal act. Federal prosecutors can bring charges for suspected bankruptcy fraud. Proof of bankruptcy fraud requires showing that the defendant knowingly and fraudulently made a misrepresentation of material fact. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both.

If you need to file bankruptcy because the amount of debt is causing stress and you are unable to pay back your debts contact Florida bankruptcy lawyers Roddy Lanigan or Eric Lanigan of Lanigan and Lanigan in Winter Park Florida.