Strategic Federal And State Criminal Defense

Are you facing allegations of bankruptcy fraud?

On Behalf of | Sep 11, 2020 | Federal Crimes |

If you are in debt over your head, chances are the option of filing for bankruptcy has crossed your mind. Bankruptcy can provide a much needed fresh start for those who are overwhelmed with debt, and the law offers several different methods for seeking debt relief through bankruptcy.

Because creditors take a loss after someone successfully completes bankruptcy, authorities are careful to look for signs of fraud throughout the process. When fraud occurs, not only do creditors lose money to which they are entitled, but the integrity of the bankruptcy system suffers. Fraud can be a minor omission of fact or can involve large sums of money. If you are facing accusations of bankruptcy fraud, you may be at risk of serious penalties.

What does bankruptcy fraud look like?

For individuals, Chapters 7 and 13 offer two paths to financial freedom. After completing Chapter 7, the court may discharge, or cancel, most of your unsecured debt. However, you must submit to the liquidation of some unnecessary assets. You may also qualify for Chapter 7 only if your income is below a certain level. With chapter 13, however, the court will approve a plan for you to repay as much debt as possible.

Some who apply for bankruptcy may earn too much money to qualify for Chapter 7, or they do not want to be on a payment schedule, as they would be with Chapter 13, and prefer to have their debts wiped clean through Chapter 7. Failing to disclose to the court all of their assets or underreporting their income to qualify for Chapter 7 is a form of fraud. Other examples of bankruptcy fraud include:

  • Making untruthful statements on a bankruptcy form, which is a form of perjury
  • Offering a bribe to a bankruptcy trustee
  • Accepting a bribe as a trustee
  • Concealing the fact that one has filed for bankruptcy multiple times

If you are facing accusations of bankruptcy fraud, as a filer, trustee or other party in the process, you may have a great deal on the line. Most types of bankruptcy fraud are federal crimes, which means you will likely be dealing with federal courts that have little discretion when it comes to sentencing following a conviction. For the most positive outcome of your situation, you would be wise act quickly to seek the assistance of a skilled California attorney who has experience with both state and federal charges.