Sometimes, it makes sense to file for bankruptcy in a federal bankruptcy court if you have more debts than you can manage. When bankruptcy is filed, you are essentially safe – creditors can no longer attempt to sue you or collect property to pay debts. They must instead go to the court and determine how to get repaid through your property, what you owe, and so much more. However, sometimes something known as bankruptcy fraud occurs – which is when you have concealed assets, made false statements, filed a false claim, or destroyed financial records. Depending on if you acted with knowing intent or if you used less deception, you could be charged on either a criminal or civil level.
Concealing Assets and Bribery
Concealing assets and bribery are two of the most common types of bankruptcy fraud. When somebody conceals assets, they are trying to prevent the bankruptcy court from finding out what the debtor owes. Court officials lump everything together into a bankruptcy estate, which can determine how much you owe to everyone else. In a way to prevent the court from finding out about certain assets, people will sometimes conceal this property – which is illegal. In other cases, bribery may be used. Somebody who is in debt may try to convince a creditor not to file a claim by offering them cash in return.
A trustee is put in charge of watching over a bankruptcy case after it has been filed. If they believe that fraudulent actions took place, then they can ask the court for civil penalties. If the fraud was serious enough, perhaps concealing millions in assets, a criminal case could be filed against the debtor. These penalties can become extremely serious, compared to civil penalties, which usually include forfeiture of discharge rights, and loss of exemptions.
Criminal penalties can include prison time, probation, and fines. In fact, you could receive up to 5 years in prison with $250,000 in fines if you commit the crime of bankruptcy fraud! Call us today to find out how we can help you if you have committed a crime of fraud and need our help.