Bankruptcy fraud

Post 3 The problem is with attorneys and trustees.

Bankruptcy fraud

See Article History Bankruptcy fraud, the act of falsifying information when filing for bankruptcy. It may also take the form of filing for bankruptcy to deceive creditors. In the United States, about 10 percent of bankruptcy filings involve fraudulent claims. The four most commonly encountered fraud schemes are concealment of assets, petition mills, multiple-filing schemes, and bust-out schemes.

Concealment of assets When debtors file for bankruptcy, they are required to list all their assets so that creditors will have the opportunity to claim a share of the earnings from the sale of those assets.

Debtors who commit concealment of assets fraud will intentionally neglect to list all their assets, in the belief that creditors cannot obtain payment from the sale of assets that are not known. Concealment of assets is the most commonly encountered form of bankruptcy fraud, over two-thirds of all fraudulent bankruptcy cases invoking variants of this scheme.

There are several variations of concealment of assets fraud. In one variation, debtors will transfer the assets they wish to keep to the name and financial accounts of a family member who has good credit. Another variation involves hiding cash assets in accounts overseas and outside the legal jurisdiction of U.

Petition mills Petition mills take advantage of poor debtors who wish to save their homes. The debtor then agrees to pay the agency for its services. Many times these agencies have no intention of contacting the landlord.

The tenant continues paying the agency, while the agency will extend the eviction process out over several months.

By the time tenants realize that they have been duped, their credit has been destroyed, their bank accounts have been drained, and their homes have been taken.

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These operations tend to take place in large metropolitan and urban neighbourhoods with substantial numbers of poor people. Some petition mill operations also function under the guise of credit counseling services.

The activities are similar, only the pretense changes. In the end, when the scheme is discovered, the debtors will find that counselors have made their credit record worse and that they have lost the money spent on counseling.

Multiple-filing schemes Multiple-filing schemes work in much the same manner as concealment of assets fraud.

Bankruptcy fraud

In both instances, debtors decline to list all their assets when filing for bankruptcy. Unlike concealment of assets, these operations are repeated multiple times in separate states. Individuals who engage in this form of fraud will travel from state to state filing bankruptcy claims in each state.

Many times the debtor will use his or her own personal identifying information, including social security number, birth date, and name. However, when this information becomes unusable, the debtor will move to the use of illegally obtained information.

By combining fraudulent bankruptcy skills with the skills of an identity thief, the debtor can move from state to state filing bankruptcy claims in the names of unknowing victims.Oct 26,  · According to the United States Bankruptcy Court, there were more than , bankruptcy filings in fiscal year Bankruptcy fraud results in serious consequences that undermine public confidence in the system, taint the reputation of honest citizens seeking protection under the bankruptcy.

Feb 08,  · In very rare cases, bankruptcy fraud is committed when a petitioner attempts to bribe a court trustee. This will certainly result in the maximum penalty!

When declaring Chapter 7 or Chapter 13 bankruptcy, be sure to stay on the right side of the law – or else rather than alleviating your money worries you will be increasing them as well as /5().

The penalty for bankruptcy fraud is nothing to sneeze at: maximum sentences can include up to five years in prison and/or a $, fine.

Bankruptcy fraud

So what’s considered bankruptcy fraud – and what are the consequences? Federal bankruptcy proceedings can be a lifesaver for honest individuals overwhelmed by debt as a result of unemployment, a medical crisis, divorce, disability, or any number of other legitimate.

To report suspected bankruptcy fraud, please prepare a written summary that contains the following information. Requested Information.

Petition mills

Name and address of the person or business you are reporting. The name of the bankruptcy case, case number, and the location of where the case was filed.

In this unusual bankruptcy fraud case, an Indiana woman stole her husband’s identity—while the couple was still married—and began to loot his (k) retirement fund and other assets.

Bankruptcy - Wikipedia