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Beware Bankruptcy Fraud!

On Behalf of | Feb 15, 2023 | FEDERAL CRIMINAL CASES |

Bankruptcy fraud is a type of white-collar crime of which some might be unaware.  It can occur where an individual or organization seeks to gain an unfair advantage from the bankruptcy system by providing false or misleading information. It can include a variety of activities such as concealing assets or income, filing multiple bankruptcies in different states, transferring assets to exempt categories, or claiming expenses or debts that do not exist.

One of the most common forms of bankruptcy fraud occurs when individuals attempt to hide assets they do not want to lose during the bankruptcy process. This can include transferring assets to other family members and friends with the intent of recovering them after the bankruptcy is complete, or withholding information about assets and income by intentionally not disclosing these items on their bankruptcy applications. It is also illegal to hide or destroy financial documents, such as bank statements or tax returns.

Another form of bankruptcy fraud involves filing multiple bankruptcies in different states to avoid certain creditors or to take advantage of different exemptions. Individuals may also try to claim excessive expenses or debts, such as those related to medical bills, gambling losses, or luxury items, that are not valid. In addition, individuals may try to transfer assets to exempt categories, such as university tuition accounts or retirement funds, to protect them from creditors.

Ultimately, bankruptcy fraud is illegal and can carry serious legal penalties such as jail time, fines, and restitution. Individuals and organizations should ensure that all information disclosed on bankruptcy applications is true and accurate.

It is imperative to contact an attorney who is experienced at defending cases of bankruptcy fraud if charged with, or suspected of a crime.  Hale Law Firm, PC is experienced in dealing with bankruptcy fraud cases, and has tried them to jury in the Eastern District of North Carolina.