Understanding The Types Of Bankruptcy Fraud
The bankruptcy system is designed to give an individual or company a chance to start over financially. While there are trade-offs for filing for bankruptcy as with anything else, the reality is that some debtors would simply never be able to dig their way out of debt otherwise. Bankruptcy enables a borrower to discharge or reorganize their obligations and/or to equitably distribute their non-exempt assets among creditors, resulting in an eventual financial fresh start that attracts many legitimate borrowers. However, bankruptcy can also provide an opportunity for other borrowers to attempt to outsmart the system through fraudulent means.
Types of Bankruptcy Fraud
There are multiple reasons to be forthcoming throughout the bankruptcy process. One of the most important reasons is that no borrower wants to be subjected to the consequences that can come with a criminal conviction related to bankruptcy fraud. One Florida woman is facing up to five years of incarceration and a fine of up to $250,000 after admitting to bankruptcy fraud in the form of concealing more than six figures of funds she embezzled from the operating account of her former employer. She already has to pay restitution in the amount of $145,386.93 to the U.S. Bankruptcy Trustee and may face additional consequences.
No one wants to find themselves in that kind of predicament. The first step to avoiding a conviction related to bankruptcy fraud is understanding the kinds of things that might be interpreted as fraudulent activity. This includes:
- Hiding assets. As shown in the example above, the most common form of fraud is when borrowers try to conceal certain assets in an effort to not to have to turn them over. Nearly 70 percent of all bankruptcy fraud involves the concealment of assets.
- Falsifying information. Another fraudulent behavior is intentionally filing forms that contain false information or are incomplete in an attempt to be deceptive. In addition to facing allegations of bankruptcy fraud, this can also trigger criminal charges of perjury.
- Attempting bribery. It is never a good idea to try to bribe an officer of the court, but people do attempt it and this is another form of bankruptcy fraud.
Regardless of the action, anything that could be interpreted as these kinds of bankruptcy fraud could unfortunately lead to a prison sentence, steep fines or both.
We Can Help You Maintain Transparency
Bankruptcy may be able to provide a second chance when it comes to financial freedom, but an essential part of successfully making it to your chance at a full recovery is ensuring that your bankruptcy is filed timely and accurately. Hiring a qualified attorney is one of the best tools you have for ensuring that you have submitted all of the accurate and appropriate paperwork to complete your bankruptcy. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, you can depend on us to use our knowledge and experience to help you maximize your chances of obtaining the outcome you desire. Contact us today for a free and confidential consultation.