Can I do a Bankruptcy on my own? Maybe, but Bankruptcy Fraud Is An Easy Mistake to Make

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When times are tough, bankruptcy may be an attractive option if your struggling with unemployment or rising debt. It may even seem like a good idea to save some much needed money on an attorney and DIY. But bankruptcy is a process that demands knowledge and understanding to avoid potential pitfalls and mistakes. In fact, if you don’t proceed carefully you could be facing federal bankruptcy fraud charges which include penalties up to five years in prison and fines as high as $250,000.
While the idea of a clean financial slate and getting fresh start can be an attractive option, so can the temptation to go beyond the bounds of whats allowed under bankruptcy laws to avoid creditors.
Generally four major ways can get you in trouble with Bankruptcy fraud:

  • Hiding Assets and Accumulating Debt
  • Filing false or incomplete forms
  • Multiple bankruptcy petitions
  • Bribing or enticing the trustee

Hiding Assets and Accumulating Debt

The majority of bankruptcy fraud cases involve a person who filed and tries to hide or give away assets so as to prevent them from being liquidated, or sold, in a Chapter 7. Some debtors will gift away assets, such as putting cars under other family members or claim they paid off debts for which there is no record to family members or attempt to transfer assets to a small business to disclaim them. And still others purposely max out credit cards, take out as many payday loans or maybe a second mortgage to take advantage of their available credit with no intention to pay it back.

Filing false or incomplete forms

On a long enough timeline mistakes are inevitable, everyone makes mistakes; even judges recognize that and will look past inadvertent errors that are unintentional. However, misrepresentations that are intentional and consistent mistakes that suggest that a party to a bankruptcy case has a general indifference to the truth can not only lead to dismissal of the bankruptcy case but even result in the filing of criminal charges.
The Bankruptcy forms, which are available at the court’s website, require that you list of all of your income, assets and liabilities, even assets (such as an expected inheritance, pension or retirement account) that you anticipate receiving that would include any money owed to your or claims you may have against another party. This task usually proves to be complex, so we recommend that you consult with an experienced bankruptcy attorney to make sure that all of the information filed in your case is accurate and a complete accurate disclosure. By signing the filings you are certifying, under penalty ofperjury, that the information provided in the forms is true and accurate. The consequences for a false or
misleading can be severe, there is no reason to risk making that mistake.

Multiple bankruptcy petitions

Fraudsters employ a common scheme to file multiple bankruptcy petitions in different jurisdictions under different names or other identifying information. The tact is designed slow down the court’s ability to process the bankruptcy case and any liquidation of the assets in the debtor’s estate. Usually the purpose is to give the fraudster more time to hide assets from their creditors and frustrate the trustee and the court. Likewise, people use this method to take advantage of the automatic stay provided with each filing with, abusing the stay is a violation of applicable law. Abusing the court process in this fashion usually results in identity theft criminal charges.
The Bankruptcy law has many complicated aspects and filing a valid voluntary petition is process that requires competence and understanding. Accuracy and complete disclosure of your assets and liabilities is critical to make sure you have successful petition being discharged. Interestingly, to process a smooth bankruptcy sometimes takes months of planning and information gathering before filing the petition with the Court. If you or a loved one are considering filing for bankruptcy, we strongly suggest that you contact an experienced bankruptcy attorney to discuss your situation and your options before deciding to go forward.