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Avoiding plus Reporting Bankruptcy Scams

Are you currently filing for bankruptcy to get a clean financial slate? The ultimate way to destroy this start will be to lie or hide any property you have over the bankruptcy process. This is called bankruptcy fraud, and it is a federal crime.

Based on data from the IRS, 10 percent of bankruptcy filings involve some portions of fraud. With bankruptcy filings averaging 1.23 million annually over the last five-years, this means 123,000 people committing bankruptcy fraud each and every year. The IRS takes bankruptcy fraud very seriously, so you need to make sure to prevent even the appearance of fraud.

What Is Bankruptcy Fraud?

The best way to avoid bankruptcy fraud is always to know exactly what it really means. Bankruptcy has specific federal laws that guide how the entire process goes. These laws are available to safeguard both you and your creditors. Should you give false information or hide property so that it can't be sold, your creditors are cheated out of money they're eligible to in the bankruptcy laws. There are four majorforms of bankruptcy fraud:

• Hiding property
• Giving false statements on official bankruptcy forms
• Filing multiple times
• Trustee fraud

Hiding Your Property

Hiding or understating the worthiness of houses is usually the top way people commit bankruptcy fraud. You need to report your entire income and property to the court-appointed trustee to your bankruptcy. The trustee will sell much of your property to settle your creditors. If you hide any of your property, the trustee won't have the capacity to pay your creditors the entire amount they'reentitled to underneath the law. You're also committing fraud in the event you transfer your assetsto your friends or family with the intention that your creditors can't find it.

Giving False Statements

Many official forms are submitted when filing for bankruptcy. Giving fake statements or purposely leaving questions unanswered on these forms is bankruptcy fraudulence. It's essential to completely answer the questions in the forms and be open and honest over the entire bankruptcy process.

Filing Multiple Times

Bankruptcy laws have limits on when and how many times you can file for bankruptcy. Filing too many times in violation of these laws is considered fraud. Sometimes people will use false names and Social Security numbers to file bankruptcy many times in the same state. Others will use their true identification but seek bankruptcy relief in different states.

Trustee Fraud

The IRS considers trustee fraud as the most detrimental kind of bankruptcy fraud. For the reason that it involves the court-appointed trustee deceiving the court to receive a bribe from the person filing for bankruptcy. Any trustee caught committing fraud is strongly pursued by law enforcement.

Bankruptcy Fraud Consequences

If you are caught committing bankruptcy fraud, you could be facing a fine around $250,000. Additionally, you may be sentenced to prison for up to five years. These harsh legal consequences should persuade you to never make an attempt to commit fraud during the bankruptcy process.

Reporting Bankruptcy Fraud

If you suspect someone's committing bankruptcy fraud or has wrongly filed bankruptcy in your name, you must report this crime to the government. You can help the investigation by gathering certain kinds of information, including:

• Name and address of the suspected person
• Name and location of the bankruptcy case
• Description of the alleged fraud
• Identification of any hidden or undervalued property

For help with an Athens GA chapter 7 bankruptcy, call an Athens bankruptcy lawyer. A bankruptcy attorney Athens could give you the help you need.