You may have heard news reports over the years of big names or celebrities in trouble for bankruptcy fraud. While some may have taken purposeful action to land into the hot seat, some simply made crucial mistakes unknowingly. If you or any one you know is seeking help with debts in a bankruptcy in Kentucky, it is important to know a few of the actions that could be suspicious in the eyes of the court.
One of the main actions that can lead to suspicions of bankruptcy fraud is moving, transferring, the sale of or inaccurate information about assets. It isn’t uncommon for people to fear the loss of assets in the bankruptcy process, but there are strict rules about the reporting and handling of assets in bankruptcy. Attempting to conceal information encompasses about 70% of all bankruptcy fraud cases, whereby debtors attempt to lie about the value or whereabouts of an asset. While there are some allowances for the sale of an asset before or during a bankruptcy case, it is best to speak with your Kentucky bankruptcy lawyer prior to making that sale.
Another leading cause of bankruptcy fraud is the misrepresentation of your personal information or identity. Using someone else’s name, falsifying your identity or filing information, and filing multiple cases across locations are all prohibited actions. The bottom line is that honesty is the best policy, anything other than honest information and communications is likely to lead to charges of bankruptcy fraud. If convicted, debtors face a sentence of up to five years in jail and/or a fine of up to $250,000.