What is Bankruptcy Fraud?
People in dire financial situations are forced to file for bankruptcy because they are unable to pay debts. Declaring an inability to pay is not an easy road to take, but the help of an experienced bankruptcy lawyer can help to proceed in compliance with strict laws.
What is Bankruptcy Fraud?
There is no singular definition of the details involved in committing bankruptcy fraud because it can happen in many different ways. The majority of cases deal with the omission of valuable assets to a creditor that is attempting to liquidate. It usually involves relocating these assets to a trusted accomplice so that it is impossible for the creditor to take it into possession.
Other individuals violate bankruptcy law by filing false claims in multiple states, often using a fake or stolen identity. A unique circumstance does not involve deception on the part of the debtor, but instead a third party firm offering their services to fight against the eviction of a client. These schemes involve the use of submitted information to gain access to bank accounts, file for bankruptcy, and collect fees for their services.
Why Does it Happen?
A common reason that someone would choose to conceal their assets is to prevent losing them to a creditor. Filing multiple claims effectively slows down the process of liquidating assets to provide more time to make arrangements to have them relocated. An individual or business may also view a bankruptcy filing as a way to clear their name of any debts, even if they are not necessarily without the means to pay.
Many cases involve multiple crimes combined with fraud, such as money laundering or identity theft. If the court is able to prove a fraudulent bankruptcy case, the guilty party is faced with a major fines and years confined to a prison cell. Once other activities are factored in, consequences result in more extreme sentencing to fit the nature of the crimes. A case in 2013 involved the conviction of an Iowa man caught up in bankruptcy fraud, bribery, conspiracy, concealment of income, and other violations of IRS law. He faced over $26,000 in restitution, almost 4 years in prison, and 3 years of supervision after release for his crimes.
If you find yourself in an unfortunate situation that you need the help of a bankruptcy lawyer, fill out our contact form so that we can set up an appointment. Our experts will make sure that you are able to proceed in compliance with bankruptcy law and get through the rough time without any unnecessary complications.