Bankruptcy fraud is a huge trouble in the United States. It is very tempting to commit because, if successful, it may let the transgressor illegally profit with lots of money which they ought to not be entitled.
There are specific rules that define bankruptcy fraud. The penalties, fines and possible jail terms, vary based on the state where they are committed.
One form of fraud is knowingly making fraudulent statements towards the bankruptcy court. For example, one question you will be asked is when you’ve filed for bankruptcy within the last seven years. You may have filed for bankruptcy in another state or under another name and continue to make do with filing for an extra bankruptcy in another state convinced that you may not be found out. But, if you do so, you’ve committed perjury and can be prosecuted for fraud.
A second form of fraud is when a filer efforts to conceal assets or properties that he owns from your bankruptcy trustee. Naturally, no one wants to lose valuable possessions that they have acquired over the years. Unfortunately, if you file for bankruptcy, most assets that you own become possible candidates for liquidation. This is because the trustee is empowered to sell off as much of our assets as he can to increase money using which to pay back your creditors. By hiding any of your assets, you might be committing a fraudulent act upon the judge.
A third form of bankruptcy fraud is once you knowingly run up debts ahead of declaring bankruptcy with all the intent of never paying the a reimbursement. Many people look upon this like a harmless way of larceny because it are a wide company that these are cheating. The courts, however, look upon this far more seriously. They, along with the credit card companies, will strenuously push for prosecution in such cases.
The above kinds of fraud are typical committed by debtors. But, fraud can be committed by the creditor also. For example, sometimes a creditor frustrated to get the cash he or she is owed from your bankruptcy court, will attempt to serve the judge and collect money through the debtor in alternative methods. If he attempts this after receiving notification the debtor has filed for bankruptcy, he’s committed fraud upon a legal court at the same time.
Since the brand new bankruptcy law has transpired, creditors more than ever before before, have become a lot more set on enforcing the provisions in the laws.