Bankruptcy is a complex process that involves a considerable amount of planning and attention to ensure all matters are legal. Unfortunately, this is to make it more difficult for filers to commit bankruptcy fraud. If you’re planning on filing, understanding what constitutes bankruptcy fraud is critical to ensure you avoid these actions and adhere to the rules is critical. Luckily, the following blog explores these matters in further detail and covers the importance of connecting with a Memphis, TN consumer bankruptcy lawyer who can help guide you through these complex matters.
What Is Bankruptcy Fraud?
Bankruptcy fraud is a form of fraudulent activity that typically involves underreporting assets or intentionally falsifying documents to avoid paying creditors back When you file for bankruptcy, you are legally required to list all assets when filing. However, many decide they will “forget” to list assets or transfer ownership to a friend or family member so they do not have to report this. The following are all ways someone may commit bankruptcy fraud when filing:
- Intentionally leaving assets off forms
- Transferring assets before filing
- Filing multiple times in different jurisdictions
- Destroying documents
Even something like making large purchases immediately before filing for bankruptcy with the intention of never repaying the creditor can be considered fraud.
What Are the Penalties for This?
You can face civil and criminal penalties if you are found to commit bankruptcy fraud. Typically, actions of presumptive fraud, like writing bad checks or making big purchases before filing, are considered civil matters. As such, if a creditor files a lawsuit because of your wrongdoing, your case may be dismissed and you may be prohibited from filing again.
However, intention acts to conceal assets or falsify documents during your bankruptcy case can result in criminal charges. These penalties can be incredibly harsh, with fines up to $250,000 and twenty years in prison.
What Can I Do to Ensure My Filing Is Legal?
As you can see, accidentally committing bankruptcy fraud can have intense impacts on your life. Though most would understand that mistakes happen, forgetting to list certain assets can result in legal trouble. As such, the best way to avoid issues is to work with an experienced bankruptcy attorney who can help ensure your forms are completed thoroughly and correctly. Additionally, if any issues should arise, your lawyer can help you quickly remedy the errors so you can avoid criminal responsibility.
At the Arnold Law Firm, we understand how complicated these matters can be, and how important it is to ensure your filing is legally valid. That’s why our team will do everything possible to help guide you through these complicated times. Connect with us today to learn how we can fight for you during these issues.
