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Fraud charges for woman filing for Chapter 13 multiple times

With the financial challenges that many people are facing in Florida, bankruptcy can be a good option for some. However, there are certain rules and qualifications for bankruptcy, to prevent people from abusing the system. The idea of being able to dismiss your debts or restructure them for easier payment can be tempting, but bankruptcy is a tool that is meant to help those who truly need it. In fact, fraudulently filing for bankruptcy can get people in serious trouble.

A Texas woman has been charged with bankruptcy fraud, after her attempts to file for Chapter 13 bankruptcy were dismissed several times. She filed unsuccessfully six times between 2009 and 2012, but federal authorities say she had omitted information that ultimately resulted in the fraud charges. For example, she failed to disclose her Social Security number in her bankruptcy filings, and did not notify the court of her previous attempts.

For her first two filings, the woman used a lawyer’s services. She filed without an lawyer during the subsequent four Chapter 13 filings. The judge dismissed each of her cases because she didn’t file a statement of her monthly income or other required documents in time.

At the time of her first filing, the woman had unsecured debt (mostly mortgage) of $189,005, and $74,362 in unsecured debt. It’s unknown if she would have qualified for debt relief through Chapter 13 if she had put together her documents properly. However, gathering together the documents needed to file for bankruptcy, as well as disclosing and not hiding important information, can make a difference as to bankruptcy approval and not being charged with fraud.

Source: The Dallas Morning News, “Dallas woman who filed for bankruptcy six times in four years is charged with fraud,” Kevin Krause, May 22, 2013

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