Tucker Arensberg Attorneys Criminal Defense Group

White Collar Crime, Internal & Government Investigations

Bankruptcy Fraud

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There are three general ways to commit bankruptcy fraud in the United States.

  1. Concealing your assets. Concealment of assets accounted for almost 70% of all fraudulent bankruptcy cases, according to the latest FBI statistics. This type of fraud happens when a company or individual fails to list one or multiple assets on their claim. By concealing an asset, creditors cannot fully liquidate valuables to recover the unpaid debt. Many people will try transferring money or property into a family or associates’ possession so that the asset cannot be confiscated.
  2. Petition mill, which is committed by a third party. Petition mills usually target urban neighborhoods with poor populations and offer a fraudulent service to tenants facing eviction. Once the victim seeks the petition mill’s council, they are usually misled into thinking they will be avoiding eviction and lowering their debts. The petition mills will then file for bankruptcy in the name of the victim and charge outrageous fees and severely damage the victim’s credit.
  3. Filing for multiple bankruptcies. This can be done by filing in more than one state, either using their real name and information, false information or a combination of the two. The filer will list their same assets on multiple claims and will deliberately leave out assets. Failure to disclose your true marital status is another way to falsify information to help conceal assets or even file multiple times.

Mistakes may happen–especially if you file for bankruptcy alone. But when you intentionally commit a fraudulent act when filing for bankruptcy, there are serious consequences. Prosecutors can bring federal charges for bankruptcy fraud. Prosecutors need to show that the defendant knowingly and fraudulently misrepresented a material fact. Being found guilty of bankruptcy fraud can result in up to five years in prison, a fine of up to $250,000, or both. In some cases, the intent to commit fraud is enough to receive punishment.

Filing for bankruptcy is complicated but when you accidentally or purposely do something wrong, it can leave you not only with a denied bankruptcy petition but with criminal charges. Don’t let that happen–let the attorneys help you in your bankruptcy case today. Contact us today to book a free legal consultation.