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What is bankruptcy fraud and how is it committed?
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What is bankruptcy fraud and how is it committed?

On Behalf of | Mar 23, 2022 | Uncategorized

Many Florida residents find that filing for bankruptcy is helpful when they have serious debt. However, doing it the right way is important and can prevent unexpected charges of bankruptcy fraud.

What is bankruptcy fraud?

Bankruptcy is a good tool to help people struggling with debt to find a solution to either alleviate that debt or pay it back over time. However, just like with any other option that offers financial help, bankruptcy can be abused. When that happens, it’s known as bankruptcy fraud. Bankruptcy fraud is considered to be a white-collar crime.

What are common examples of bankruptcy fraud?

Bankruptcy fraud is often committed when a person who files for bankruptcy hides assets. This can be done by giving another person those assets to hide for a period of time. However, depending on which type of bankruptcy is filed, a person might not be able to keep all of their property. Hiding those things can result in serious repercussions.

A business owner relying on bankruptcy to cancel out any illegal dealings is another form of bankruptcy fraud. The same can be said for starting a new business, buying equipment with a credit card and then immediately filing for bankruptcy instead of paying off those items.

Sometimes, creditors commit bankruptcy fraud as well. A common way they do it is by falsely claiming a debtor still owes them money after they have already been paid in full. Creditors who engage in this crime often also file false claims.

If a person files for bankruptcy multiple times or in multiple states at a time, it’s another form of bankruptcy fraud. Often, when this occurs, the individual might lie about their name or other information.

Filling out false information on bankruptcy papers is also considered bankruptcy fraud.

If you’re facing bankruptcy fraud charges but know you made an honest mistake, you need immediate help. Protect your rights every step of the way.