Are you currently declaring bankruptcy to acquire a clean start? The ultimate way to ruin this start is always to lie or hide any property you keep over the bankruptcy process. This is known as bankruptcy fraud, and it is a federal crime.
According to the IRS, 10 percent of bankruptcy filings incorporate some portions of fraud. With bankruptcy filings averaging 1.23 million annually over the last five-years, this means 123,000 people committing bankruptcy fraud yearly. The IRS takes bankruptcy fraud very seriously, and that means you need to make sure to avoid even the appearance of fraud.
What Is Bankruptcy Fraud?
The best way to avoid bankruptcy fraud is to know precisely what it really means. Bankruptcy has specific federal laws that guide the way the entire process goes. These laws exist to protect both you and your creditors. In the event you give false information or hide property so that it wouldn’t be sold, your creditors are cheated out of money they’re permitted in the bankruptcy laws. You’ll find four majorkinds 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 premises is usually the number one way people commit bankruptcy fraud. You need to report all of your income and property to the court-appointed trustee to your bankruptcy. The trustee will then sell much of your possessions to pay off 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 underneath the law. You’re also committing fraud if you transfer your possessionsto your friends or family to ensure your creditors can’t find it.
Giving False Statements
Many official forms must be filled out when filing for bankruptcy. Giving wrong statements or deliberately leaving questions un answered on these forms is bankruptcy fraud. You should completely answer the questions in 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’ll be able to 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 many times while in the same state. Others will use their true identification but seek bankruptcy relief in numerous states.
Trustee Fraud
The IRS considers trustee fraud as the worst form of bankruptcy fraud. For the reason that it involves the court-appointed trustee deceiving the court to receive a bribe from the person filing for bankruptcy. Any trustee caught committing fraud will be strongly pursued by law enforcement.
Bankruptcy Fraud Consequences
If you are caught committing bankruptcy fraud, you’re likely to be facing a fine up to $250,000. Furthermore, you could be sentenced to prison for up to five years. These harsh legal consequences should persuade you to never try to commit fraud in the bankruptcy process.
Reporting Bankruptcy Fraud
If you feel 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 an Augusta GA chapter 13 bankruptcy , find a bankruptcy attorney Augusta GA. A bankruptcy attorney Augusta Georgia could give you the help you need.
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