Bankruptcy Filings??

Feb 28th, 2014 | By | Category: Debt

One of the major problems that the bankruptcy courts have to address in the U.S. is bankruptcy fraud. It is very tempting to commit, for a number of persons in financial trouble. This is because, if successful, the transgressor is possibly able to illegally profit to the tune of thousands of dollars.

There are specific rules that define bankruptcy fraud. The penalties, fines and possible jail terms, vary as per the state in which they’re committed.

One of the more common types of fraudulent behavior when filing for bankruptcy is simply lying. In other words, the filer is intentionally making dishonest statements before the bankruptcy court. One question that you’ll be asked is if you’ve filed for bankruptcy during the last seven years, for example. You may have filed for bankruptcy in another state or under another name and to attempt to get away with filing for a second bankruptcy in another state thinking that you will not be found out. But, if you do so, you have committed perjury and can be prosecuted for fraud.

A second type of fraud is where a filer attempts to conceal assets or properties that he owns from the bankruptcy trustee. Naturally, no one wants to lose valuable possessions that they have gained over the years.

Nobody likes to hear this, but when you write a bankruptcy filing, the bulk of your assets are up for grabs. This is because the trustee is authorized to sell off as much of our assets as he can to raise money with which to pay off your creditors. You are committing a fraudulent act upon the court by hiding any of your assets.

You’ll find 2 possibilities: a voluntary bankruptcy or involuntary bankruptcy. Bankruptcy law when you even determine whether you’re eligible to even declare themselves bankrupt. There is really a very stressful dynamic that goes on when individuals are declaring bankruptcy one needs to be very careful on making their selection considering that. When hiring an individual bankruptcy attorney, you should examine it like you’d be a team and the lawyer is a great asset to help the team.

Then there is a third common type of fraud in bankruptcy filings. This is when, before the actual filing, you knowingly and intentionally run up debts. And you do this with the intention of never having to pay the money back. Now, a lot of people consider this to be a harmless form of thievery. Mainly because it is a large company that they’re cheating rather than a person or a small business. However, the courts, do not exactly see things this way. In contrast, they, along with the the credit card companies, will push hard for prosecutions if they suspect you of doing this.

The above types of fraud are all committed by debtors. But, fraud can be committed by a creditor as well. For example, sometimes a creditor frustrated in getting the money he is owed from the bankruptcy court, will attempt to go around the court and collect money from the debtor in other ways. If he attempts this after receiving notification that the debtor has filed for bankruptcy, he has committed fraud upon the court as well.

Since the new bankruptcy law has passed, creditors more than ever before, have become much more severe about enforcing the terms of the laws.

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