During any bankruptcy, a person’s creditors will have an opportunity to object to the forgiveness of your debts. One of the most important things to make sure of before you file is that you are not committing bankruptcy fraud, which if found, can jeopardize your case. How might one run afoul of their creditors or the court during bankruptcy?
Certain activities committed before filing or retaining a bankruptcy attorney can result in a successful objection on the grounds of fraud:
Here are a few things to avoid before the process of filing bankruptcy:
- Obtaining any credit through false representations of assets or income.
- Falsifying any documents used to support a credit request to inflate or decrease your worth.
- Making purchases on credit with no intention of repaying the debt. Any substantial purchases within 90 days before filing a bankruptcy case can give grounds to creditors filing objections to discharge on these grounds.
- Making expensive purchases of luxury goods or taking out a large cash advance shortly before filing bankruptcy.
- Engaging in deceptive business practices.
- Knowingly endorsing a bad check.
One can also run into trouble after they have retained an attorney with the intention of filing bankruptcy, during the actual process of filing the paperwork to declare bankruptcy or even when testifying on court date(s).
Here are a few things to avoid during the process filing bankruptcy:
- Hiding any assets that belong to you in order to prevent the item(s) from being sold to pay creditors.
- Leaving out of your disclosures any property transfers or gifts given before filing the bankruptcy.
- Destroying or withholding documents requested by the court.
- Falsifying a document being submitted to the court.
- Knowingly making any false statements in the bankruptcy paperwork or to the trustee during your meeting of creditors in court.
What happens if the court says you’ve committed bankruptcy fraud?
If it is determined that a debtor has committed fraud in their bankruptcy, the court may:
- Deny the discharge of the debt.
- Dismiss the bankruptcy case entirely.
- Fine the debtor up to $250,000.00
- Sentence the debtor to up to 20 years in prison.
These are clearly some very weighty consequences which must be carefully considered before proceeding with filing a case. If you have questions about the bankruptcy process reach out to your Stockton bankruptcy attorney at (209) 952-0355.