First and foremost, bankruptcy is a form of debt relief afforded to Americans by the federal government. It requires that you truthfully and honestly give an accurate depiction of your past, present, and future financial status including all the assets you own including things like cash on hand, real estate holdings, vehicles, security accounts, and household goods to name a few. The bankruptcy courts and bankruptcy trustees who manage your bankruptcy petition rely on these admissions to determine your eligibility for bankruptcy, as well as, what your payment structure will be when filing for a Chapter 13 bankruptcy. When submitting this information to the courts, it is absolutely crucial that you are upfront and honest. If not, you could very well be looking at a huge fine and even jail time.
What is bankruptcy fraud?
Bankruptcy Fraud occurs when debtors conceal assets in order to prevent the courts seizing them, file false or incomplete forms, file multiple times in different jurisdictions or states, or attempt to bribe a bankruptcy trustee. Out of these four actions that can lead you into hot water, concealing assets in a bankruptcy cases is by far the most common. If you are found guilty of any of these actions, it is a federal, criminal crime, and carries a penalty of up to $250,000 and a five year prison sentence.
So what did Abby Lee Miller Do?
Abby Lee Miller filed for Chapter 11 bankruptcy in 2010. Afterwards, she continued to show up on Television and the bankruptcy courts thought that she could possibly be earning more than she had stated in her original bankruptcy petition. Investigators found that she concealed money earned from appearance fees, as well as, merchandise and dance lesson income. Abby Lee Miller pleaded guilty to hiding around $750,000 or more in income from here reality show during chapter 11 bankruptcy proceedings, as well as, failing to report another $120,000 which she doled out to friends to smuggle into the US from Australia: a direct violation of US Customs Laws.
Can I accidentally commit bankruptcy fraud when filing without an attorney?
Ignorance is never an excuse when it comes to the law, but fortunately, you can’t “accidentally” commit bankruptcy fraud. The criteria for fraud must prove that the act was known and intentional. HOWEVER, if you do file a bankruptcy on your own, without being represented by a Sacramento Bankruptcy Attorney, and neglect to file out certain forms or leave out important information it could have MAJOR IMPLECATIONS on your cause including delays in the discharge process, or even worse, a dismissal of your case entirely. With this in mind, it is certainly worth it to contact a qualified Attorney specializing in Bankruptcy in your state to ensure you protect your financial future and your freedom.
What are some other recent Bankruptcy Fraud cases?
In other recent news, a woman in Sugar Land, TX along with a male accomplish was indicted on federal bankruptcy fraud charges. The couple is accused of filing for bankruptcy each time they received a foreclosure notice from their mortgage company. This is not allowed and is the reason that courts have set rules that one must obtain approval from the court in order to personally dismiss their own bankruptcy. The couple repeatedly did this for each foreclosure notice they received and they also failed to disclose their previous bankruptcy filings each time. They have both been charged with perjury, in addition to, fraudulent bankruptcy filing.
A second, recent bankruptcy fraud case, involves a bankruptcy petition preparer in Virginia. The woman plead guilty to one case of bankruptcy fraud after previously being charged and pleading guilty to misdemeanors relating to unlawfully preparing of bankruptcy petitions. According to the federal prosecutors, she illegally helped another person file a petition for bankruptcy relief. This case eludes to the matter that bankruptcy petition preparers, while some view as viable, cheaper alternative to a bankruptcy attorney, are not lawyers and can’t give legal advice about your case.
A third bankruptcy fraud case in July of 2016 is from Illinois, were a man plead guilty to one count of concealing assets and three counts of fraudulently withholding of records. A common trend in these and most bankruptcy fraud cases is that individuals think they can keep assets a secret to prevent them being taken away in bankruptcy. A good bankruptcy attorney may be able to help you keep your property without breaking the law. Instead the Illinois gentlemen concealed nearly $30,000 he received from a worker’s compensation claim. He now faces prison time, hefty fines, and supervised release after jail, and restitution.
How can I prevent being accused of bankruptcy fraud in my bankruptcy case?
Bankruptcy is a serious event and is deemed a federal crime. Even though you must intend to defraud the courts to be held liable for bankruptcy fraud, you should seek legal counsel to ensure a successful conclusion of your case. It’s very important to discuss your situation with a California bankruptcy attorney before filing, to get a better idea of the process, and how you can prevent making major mistakes that could delay or dismiss your case or even worse.