Bankruptcy Fraud FAQ
A Sacramento bankruptcy attorney answers the question: What is Bankruptcy Fraud?
Answer: Bankruptcy Fraud includes any attempt by a debtor to hide or conceal an asset or debt when filing bankruptcy.
Bankruptcy fraud also includes an attempt by a debtor to discharge a debt a debtor never intended on repaying e.g. a debtor can’t go out and purchase a vehicle on their MasterCard and turn around and file for bankruptcy. This kind of purchase would be considered fraudulent or in bad faith and therefore non-dischargeable.
The consequences associated with Bankruptcy fraud are stiff. An intentional concealment or transfer of property is a Federal Crime in which the debtor may face stiff penalties and possible prison time.
In other instances a creditor may file an adversarial proceeding disputing the dischargeability of a debt. Generally, in such an instance the debtor would be responsible for paying additional legal fees for an attorney to represent the debtor in the adversarial proceeding.
Question: How do you avoid bankruptcy fraud?
Answer: Disclose all of your assets and debts. If you have any questions about transferring property consult your attorney.
Question: How would the trustee find out if I’m hiding property?
Answer: You will be asked under penalty of perjury at the 341 hearing whether or not all of your assets and debts are listed in your petition. If you lie you have committed a crime. Moreover, the trustee must receive tax returns for the last two years and paystubs for the last six months and will have a very good grasp of your current economic situation. Any red flags (significant drop in income, transfers of property, etc.) that arise on your schedules will alert the trustee to possible fraud.
Bottom line, don’t try and out smart the United States Government.
If you have questions regarding Bankruptcy in Sacramento please contact us at (916) 492-6020 in Sacramento or (916) 724-1690 in Roseville for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced Sacramento Bankruptcy Attorneys. After you have spoken with one of our Sacramento bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Sacramento Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or legal debt settlement case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Sacramento and Roseville!
