Bankruptcy can help debtors turn their lives around, but it is a highly complex process with a lot of potential pitfalls. Landing in one of them can have consequences that range in severity, from difficulty in getting the bankruptcy discharged to a full-on bankruptcy fraud investigation with additional consequences, if found guilty. If you are planning on filing for bankruptcy, know your risks and how you can best avoid these possible consequences.
What Is Bankruptcy Fraud?
Bankruptcy is intended for those that cannot afford to pay back their creditors. If, however, one files simply to avoid paying debts they owed, they can be found guilty of bankruptcy fraud – a broad term used to describe any and all intentional abuse of the system. This can include:
Of course, even innocent people can find themselves under investigation for bankruptcy fraud. They may have submitted a document in error, miscalculated figures, unintentionally omitted important information, or has otherwise managed to draw the suspicion of their bankruptcy trustee. This can lead to massive delays in discharge and, in worst case scenario situations, could lead to criminal charges, jail time, and substantial fines.
Suspicion of Bankruptcy Fraud
If a trustee suspects bankruptcy fraud, the actions they take will be highly dependent upon the debtor and the situation. An investigation may be conducted if there is not sufficient evidence to prove that fraud has been committed. Or, if there is evidence, the case may be immediately turned over to the courts for a decision. Typically, this will include denial of discharge, but it can also lead to criminal referral to the United States Trustee who may then pass the information along to the Federal Bureau of Investigation (FBI) or other appropriate agency.
Avoid Common Bankruptcy Mistakes with the Help of a Skilled Attorney
While it is true that there are debtors who intentionally commit bankruptcy fraud, the Law Offices of Eric Zelazny know that some cases truly are caused by the difficulty that many debtors experience when trying to navigate the process alone. Do not let this happen to you. Contact a skilled Tinley Park bankruptcy attorney with more than 20 years of experience in helping individuals and businesses find creative solutions for their debt. Call 708-888-2299 and schedule your free initial consultation today.