Avoiding and also Reporting Bankruptcy Fraud

Are you currently filing for bankruptcy to get a clean financial slate? The easiest method to sabotage this start will be to lie or hide any property you have through the bankruptcy process. This is called bankruptcy fraud, and it’s a federal crime.

According to the IRS, 10 percent of bankruptcy filings possess some portions of fraud. With bankruptcy filings averaging 1.23 million annually during the last 5 years, this translates to 123,000 people committing bankruptcy fraud annually. The IRS takes bankruptcy fraud very seriously, this means you need to make sure to prevent even the look of fraud.

What Is Bankruptcy Fraud?

The easiest method to avoid bankruptcy fraud would be to know exactly what it means. Bankruptcy has specific federal laws that guide how the entire process goes. These laws exist to guard both you and your creditors. In the event you give false information or hide property so that it can’t be sold, your creditors are cheated out of money they’re eligible for in the bankruptcy laws. You’ll find four majortypes of bankruptcy fraud:

• Hiding property
• Giving false statements on official bankruptcy forms
• Filing multiple times
• Trustee fraud

Hiding Your Property

Hiding or understating the worth of land is usually the number one way people commit bankruptcy fraud. You need to report all your income and property to the court-appointed trustee of your respective bankruptcy. The trustee will then sell much of your property to settle your creditors. If you hide a little of your property, the trustee won’t be able to pay your creditors the entire amount they’reentitled to within the law. You’re also committing fraud should you transfer your propertyto your friends or family so that your creditors can’t find it.

Giving False Statements

Many official forms are submitted when filing for bankruptcy. Giving incorrect statements or deliberately leaving questions un-answered on these forms is bankruptcy fraudulence. You have to completely answer the questions on the forms and be open and honest throughout the entire bankruptcy process.

Filing Multiple Times

Bankruptcy laws have limits on when and how many times you may file for bankruptcy. Filing too many times in violation of these laws is considered fraud. Sometimes people will use false names and Social Security numbers to file bankruptcy multiple times in the same state. Others will use their true identification but seek bankruptcy relief in various states.

Trustee Fraud

The IRS considers trustee fraud as the most extreme type of bankruptcy fraud. This is because it involves the court-appointed trustee deceiving the court for a bribe from the person filing for bankruptcy. Any trustee caught committing fraud would be aggressively attacked by law enforcement.

Bankruptcy Fraud Consequences

For anyone caught committing bankruptcy fraud, you’ll probably be facing a fine up to $250,000. Additionally, you may be sentenced to prison for up to five years. These harsh legal consequences should persuade one to never attempt to commit fraud through the bankruptcy process.

Reporting Bankruptcy Fraud

If you think someone’s committing bankruptcy fraud or has wrongly filed bankruptcy in your name, you need to report this crime to the government. You can help the investigation by gathering certain types of information, including:

• Name and address of the suspected person
• Name and location of the bankruptcy case
• Description of the alleged fraud
• Identification of any hidden or undervalued property

For help with a Macon GA chapter 7 bankruptcy, consult with a bankruptcy lawyer Macon Georgia. A Macon bankruptcy law firm could give you the help you need.