White Collar Crimes: What Exactly is Bankruptcy Fraud?

Concept shot of bankruptcy services

Bankruptcy fraud is essentially the abuse of bankruptcy laws in order to defraud, delay, or hinder creditors as well as the bankruptcy court. This also applies to unscrupulous individuals who are in the business of defrauding debtors looking for legal assistance for their bankruptcy cases.

Bankruptcy fraud comes in different types including the following:

Concealing assets when filing for bankruptcy – This could affect how much you’re legally responsible for repaying your creditors.

Transferring assets fraudulently – You’re not allowed to conceal or transfer assets before your file for bankruptcy.

Failure to divulge all income sources – This could affect the bankruptcy type, whether Chapter 7 or 13, you could qualify for and the amount your creditors could recover from you.

Filing multiple petitions for bankruptcy – This includes filling several petitions in multiple states using one SSN or filing multiple petitions using different SSNs.

Racking up debt prior to filing for bankruptcy – This also includes stating false information on credit applications.

Filing a bankruptcy petition using several different identities.

Filing a bankruptcy petition for the automatic stay benefit or prevent repossession or foreclosure.

Filing incorrect or incomplete bankruptcy forms deliberately – You’re required by law to sign and complete all bankruptcy forms and verify that all the information you provided is true and accurate. Aside from being considered as fraud, courts could likewise consider this as perjury.

Bribing a bankruptcy trustee appointed by the court.

Criminal defense attorneys in Houston noted that although this white collar crime is considered a civil matter that bankruptcy courts usually handle, prosecutors could bring criminal charges if the specific circumstances of the case are severe enough. In fact, you could commit bankruptcy fraud without you even realizing that you’ve done it.

To that end, even if you’re already working with a bankruptcy lawyer, you must also consult a criminal defense attorney. This is because not all bankruptcy lawyers have experience with bankruptcy fraud issues and the many related charges that it could add to your case.