Are you declaring bankruptcy to have a new financial beginning? The easiest method to destroy this start is always to lie or hide any property you have through the bankruptcy process. This is called bankruptcy fraud, and it’s a federal crime.
According to the IRS, 10 percent of bankruptcy filings possess some aspects of fraud. With bankruptcy filings averaging 1.23 million annually over the last 5 years, this means 123,000 people committing bankruptcy fraud year after year. The IRS takes bankruptcy fraud very seriously, this means you need to make sure to prevent even the appearance of fraud.
What Is Bankruptcy Fraud?
The simplest way to avoid bankruptcy fraud is always to know precisely what it really means. Bankruptcy has specific federal laws that guide how an entire process goes. These laws are there to guard both you and your creditors. If you give false information or hide property to ensure that it can’t be sold, your creditors are cheated out of money they’re entitled to within the bankruptcy laws. You can find four majorforms of bankruptcy fraud:
- Hiding property
- Giving false statements on official bankruptcy forms
- Filing multiple times
- Trustee fraud
Hiding Your Property
Hiding or understating the value of land is the number one way people commit bankruptcy fraud. It is advisable to report all of your income and property to the court-appointed trustee of your bankruptcy. The trustee will then sell much of your property to repay your creditors. If you hide a little of your property, the trustee won’t have the capacity to pay your creditors the entire amount they’reeligible for underneath the law. You’re also committing fraud if you transfer your assetsto your friends or family so your creditors can’t find it.
Giving False Statements
Many official forms are filled out when filing for bankruptcy. Giving untrue statements or intentionally leaving questions unanswered on these forms is bankruptcy fraudulence. It’s essential to completely answer the questions in 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 too many times in violation of these laws is considered fraud. Sometimes people use false names and Social Security numbers to file bankruptcy multiple times while in the same state. Others use their true identification but seek bankruptcy relief in different states.
Trustee Fraud
The IRS considers trustee fraud as the most severe kind of bankruptcy fraud. For the reason that it includes the court-appointed trustee deceiving the court to receive a bribe from the person filing for bankruptcy. Any trustee caught committing fraud would be aggressively pursued by law enforcement.
Bankruptcy Fraud Consequences
In case you are caught committing bankruptcy fraud, you’re likely to be facing a fine around $250,000. Moreover, you could be sentenced to prison for up to five years. These harsh legal consequences should persuade one to never make an attempt to commit fraud in the bankruptcy process.
Reporting Bankruptcy Fraud
If you think 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 particular sorts 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 bankruptcy , find a Savannah bankruptcy lawyer. A Savannah bankruptcy lawyer could give you the help you need.
