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Common Types of Bankruptcy Fraud

Common Types of Bankruptcy Fraud

During difficult financial times, individuals may find it difficult to maintain financial responsibility for their debts. Credit card debts, mortgage payments, and medical bills can be overwhelming, especially if the person is facing unemployment, illness, disability, or other life events that affect his or her ability to work and pay debts. While many people turn to bankruptcy out of a legitimate need for financial assistance, some individuals may attempt to gain benefits through fraudulent behavior.

Any attempt to conceal assets or hide the truth on a bankruptcy application may be considered fraud. It is important for persons acting in good faith to accurately state all of the facts regarding their financial situation. Although the temptation to improve the look of your application may be there, the complete dismissal of your bankruptcy application is a dangerous consequence to face.

Common types of bankruptcy fraud include:

o    Making false statements on the bankruptcy application

o    Attempting to conceal assets from the court

o    Illegal transfer of money to family members or friends

o    Placement of property and other assets in someone else’s name to hide it from the court

o    Failure to report inheritance, jobs, rental revenue, and other income

o    Filing bankruptcy in more than one state

o    Failure to disclose marital status

o    Use of false names and social security numbers to accrue debt and file for bankruptcy

It is important to note that excessive spending, charges, and cash advances prior to a bankruptcy filing may be considered to be fraudulent behavior. Because you have decided to file bankruptcy, you should attempt to straighten out your financial situation and should not take advantage of the system believing you will get a completely “fresh start”.

Although some people fear a stigma that comes along with bankruptcy, many people are able to emerge from bankruptcy in a far better financial position than they were previously. If done correctly, bankruptcy proceedings can help discharge debts and help people set up their finances for future success. Individuals may emerge from bankruptcy with the ability to obtain credit and a better sense of budget and money management.

If you are considering filing for bankruptcy and need guidance through the process, it is wise to consult an experienced bankruptcy attorney. For more information on bankruptcy and your legal options, visit the website of the Austin bankruptcy lawyers of Slater Kennon & Jameson LLP.