Bankruptcy fraud is no small thing. Unfortunately, it happens every day. There are a few misconceptions about what bankruptcy fraud is and who intentionally commits it.
The most common type of bankruptcy fraud is the unintentional concealment of assets. This is why using a trusted bankruptcy attorney is so important.
Intentional bankruptcy fraud
Intentional bankruptcy fraud is the crime of attempting to lie to, defraud or hide assets from the courts during a bankruptcy proceeding. Wealthy individuals are often those who file to absolve themselves of debts they don’t want to repay. In some cases, the individual has the money to pay.
The typical people who commit intentional fraud are:
- Corporate CEOs
- Loan officers
- Real estate agents
The most common problems are people who hide assets, use misleading financial records and transfer assets so they can keep them rather than use them to pay debts.
Unintentional bankruptcy fraud
In most cases, this fraud happens because someone files and doesn’t know the laws. They will miss something important or improperly declare an exemption. This is why having a trustworthy attorney is so important. They can make sure that you get all of the exemptions you deserve and keep you out of trouble with those you don’t.
Most people who declare bankruptcy do not intend to commit fraud. They do it because of unexpected bills, medical conditions or other loss of income.
Bankruptcy is a serious decision and a way for those who need it can get out from under the burden of heavy debt. It is also a chance for people to take advantage of this. Fortunately, there are harsh penalties for those who intentionally commit bankruptcy fraud.