What is Bankruptcy Fraud?
In the United States, bankruptcy fraud is a federal crime. Bankruptcy is a legal process which allows a business or individual to be discharged of all their debts due to an inability to pay. There are multiple types of bankruptcy, but all have the same definition of what types of actions constitute bankruptcy fraud. There are three methods of committing bankruptcy fraud: concealment of assets, multiple filings and petition mills. The number of bankruptcy fraud cases rises in proportion to the number of bankruptcy filings each year. Bankruptcy fraud convictions can result in a fine up to $250,000 US Dollars (USD) and/or up to five years in prison. Concealment of assets is the most common type of bankruptcy fraud. This type of fraud occurs when the debtor hides his assets during the declaration phase of the bankruptcy process, in an attempt to keep them from being liquidated. Debtors may fail to include them on the list of assets, transfer ownership to family or friends and move assets i
People declare bankruptcy when it becomes impossible to pay back creditors. Usually it is done as a last resort when the amount of debt one incurs is far greater than the amount of their income. It is a means of declaring that you do not have the money to settle any outstanding debts, and wiping those debts out. Scammers take advantage of this system by purposely running up large debts that they have no intention of attempting to pay back. There are several common types of bankruptcy fraud criminals utilize: Concealing assets When a person files for bankruptcy, the personal belongings that they still owe money on and can not pay for will be repossessed. Scammers will purchase items and attempt to conceal when declaring bankruptcy. They may claim the items were given as gifts, or sold at a garage sale in an attempt to raise money. Once the bankruptcy case is over, the criminals keep their ill gotten goods or sell them for profit. Improper forms Some scammers will give false information
