Bankruptcy Fraud – Ways to Avoid it

Are you filing for bankruptcy to have a clean slate? The best way to sabotage this start would be to lie or hide any property you possess in the bankruptcy process. This is whats called bankruptcy fraud, and it is a federal crime.

Based on data from the IRS, 10 percent of bankruptcy filings involve some portions of fraud. With bankruptcy filings averaging 1.23 million annually over the last five-years, this translates to 123,000 people committing bankruptcy fraud each and every year. The IRS takes bankruptcy fraud very seriously, this means you need to make sure to avoid even the appearance of fraud.

What Is Bankruptcy Fraud?

The simplest way to avoid bankruptcy fraud is to know precisely what it really means. Bankruptcy has specific federal laws that guide how an entire process goes. These laws exist to shield you and the creditors. If you give false information or hide property to ensure that it wouldn’t be sold, your creditors are cheated out of money they’re permitted underneath the bankruptcy laws. One can find four majorvarieties of bankruptcy fraud:

• Hiding property
• Giving false statements on official bankruptcy forms
• Filing multiple times
• Trustee fraud

Hiding Your Property

Hiding or understating the worth of houses is the top way people commit bankruptcy fraud. You have to report all of your income and property to the court-appointed trustee of the bankruptcy. The trustee will then sell much of your possessions to pay off your creditors. If you hide a little of your property, the trustee won’t have the ability to pay your creditors the full amount they’reeligible for within the law. You’re also committing fraud should you transfer your propertyto your friends or family with the intention that your creditors can’t find it.

Giving False Statements

Many official forms need to be completed when filing for bankruptcy. Giving untrue statements or intentionally leaving questions un-answered on these forms is bankruptcy fraudulence. You should completely answer the questions on the forms and be open and honest throughout the entire bankruptcy process.

Filing Multiple Times

Bankruptcy laws have limits on when and how many times you may file for bankruptcy. Filing multiple times in violation of these laws is considered fraud. Sometimes people use false names and Social Security numbers to file bankruptcy many times in the same state. Others use their true identification but file for bankruptcy in numerous states.

Trustee Fraud

The IRS considers trustee fraud as the toughest form of bankruptcy fraud. This is because it includes the court-appointed trustee deceiving the court for a bribe from the person filing for bankruptcy. Any trustee caught committing fraud will be strongly attacked by law enforcement.

Bankruptcy Fraud Consequences

When you are caught committing bankruptcy fraud, there’s a chance you’re facing a fine as much as $250,000. Additionally, you may be sentenced to prison for up to five years. These harsh legal consequences should persuade you to never try to commit fraud during the bankruptcy process.

Reporting Bankruptcy Fraud

If you feel someone’s committing bankruptcy fraud or has wrongly filed bankruptcy in your name, you should report this crime to the government. You can help the investigation by gathering certain types of information, including:

• Name and address of the suspected person
• Name and location of the bankruptcy case
• Description of the alleged fraud
• Identification of any hidden or undervalued property

For help with a Savannah GA chapter 13, consult with a Savannah bankruptcy lawyer. A bankruptcy lawyer Savannah could give you the help you need.