Over the years there has been an increase in the number of fraudulent bankruptcy cases. Part of the reason is simply due to the increased number of filings in general, the other part is due to the fact that many consumers don’t know much about the bankruptcy process. If you are considering filing for bankruptcy, make sure you know the truth about bankruptcy fraud.
The bankruptcy process is a detailed look into your financial matters. This means that you current and past financial history will be under the microscope. While this isn’t problematic for many, some people unknowingly commit fraudulent actions that can leave them facing tough consequences.
Lying or providing inaccurate information on your bankruptcy petition is one of the most common actions that is considered fraudulent. Intentional or not, not being 100% honest about your debts, assets and financial accounts can cause serious problems with your case. Hiding or concealing assets is among the top for bankruptcy fraud. Many people knowingly transfer, withhold or sell assets prior to filing in order to protect the asset from creditors. Using inaccurate personal information, such as a false social security number, or filing your case in multiple jurisdictions is also viewed as fraudulent.
Your bankruptcy petition is a signed document that pledges the information is accurate and complete, and any inaccuracies could be viewed as perjury. If the bankruptcy court suspects you of bankruptcy fraud your case is likely to be dismissed. Once a case is dismissed due to fraud you may not be able to file for bankruptcy again in the future. However, there may be a chance to have your case reinstated if the fraud was determined to be a minor infraction of an unintentional nature. More serious infractions, or those deemed purposeful, can result in the loss of assets or harsh penalties. In some cases, you could face up to $50,000 in penalty fees or 5 years in jail.