Bankruptcy Fraud

When you file for bankruptcy, you may be thinking about the relief you’ll feel once your debts are discharged. But make one error and your entire petition can be deemed fraudulent. Understanding bankruptcy fraud is critical to the success of your Columbus, Ohio bankruptcy filing. The Jones Law Firm explains.

What is bankruptcy fraud?

Bankruptcy fraud is a white-collar crime that may include:

  • Concealing assets to avoid having to forfeit them.
  • Intentionally filing false or incomplete forms. If you knowingly place false information on a bankruptcy form, you may also be found guilty of perjury.
  • Filing multiple times using either false information or real information in several jurisdictions.
  • Bribing a court-appointed trustee.

It is estimated that 70% of all bankruptcy fraud involves the concealment of assets. This may include transferring funds or property to friends, relatives, or business associates so it cannot be found. This is known as fraudulent concealment.

Other common forms of bankruptcy fraud include:

  • Petition Mills: Petition mills may seem like consulting services, aiming to help those avoiding eviction. In these cases, the tenant believes the service is negotiating on his or her behalf but is actually dragging out the proceeding, charging exorbitant fees, leaving the victim with no savings, and a ruined credit score.
  • Multiple Filings Fraud: When a debtor files for bankruptcy in multiple jurisdictions, sometimes using a combination of real and false information. Though the act of filing multiple times may not be inherently criminal, it may violate bankruptcy code provisions, and be used to mask concealment of assets.

Legal Consequences

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.

How to Avoid Bankruptcy Fraud In Columbus, Ohio

The first step to not committing bankruptcy fraud is to hire a trusted bankruptcy attorney. But there are also things you can do to ensure you did not mistakenly leave out details, or if you’ve done something recently, without realizing it may seem fraudulent.

You’ll need to be transparent about any financial transactions you’ve made recently. This may include listing all income, property, assets, and any transactions you’ve made including property sales, donations, and gifts you may have received.

The last thing you want to do is forget to tell your bankruptcy attorney that you recently were awarded a vintage car as your inheritance but gave it to your nephew–even if it’s just a familial gesture–it will not look good in court.

Other practices to be mindful of include:

  • Obtaining credit under false pretenses
  • Falsifying financial documents–purposely or accidentally
  • Making large purchases on credit that you have no intention of repaying
  • Taking large cash advantages out on a line of credit shortly before filing for bankruptcy
  • Writing bad checks knowingly
  • Engaging in deceptive business practices

One wrong move can damage your ability to gain a financial fresh start. So don’t let it happen.

Avoid Bankruptcy Fraud With The Bankruptcy Pros: The Jones Law Firm

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 Jones Law Firm help you in your Columbus, Ohio bankruptcy case today. Contact us to schedule an appointment.