When you are in debt, doing whatever you can to ease the weight on your shoulders may be overwhelming. As such, you may have explored all options before deciding that filing bankruptcy is in your best interest. However, it’s important to understand that this process is carefully watched, and if you attempt to defraud the system, you can face serious penalties for these actions. If you are charged with bankruptcy fraud, it’s imperative to connect with an Oklahoma City federal crime lawyer who can examine the circumstances of your case to determine the best course of action. Keep reading to learn more about these charges.
How Does Bankruptcy Work?
Bankruptcy is a form of debt relief that requires the filer to either liquidate their assets to repay creditors, known as a Chapter 7 filing, or begin a repayment plan that will last three to five years. At the end of both of these processes, any remaining, qualified debt will be discharged, meaning the filer is no longer legally obligated to repay these debts.
Common examples of dischargeable debts are generally unsecured debts like credit card bills, medical debt, or personal loans. However, certain debts are not eligible to be discharged, and you will be responsible for repaying the remaining amounts following bankruptcy. Examples of non-dischargeable debts include child support, alimony, taxes, or debts owed as the result of a personal injury settlement.
What Constitutes Bankruptcy Fraud?
Bankruptcy fraud occurs any time a filer includes inaccurate information or purposely misrepresents their circumstances when filing for bankruptcy in an attempt to gain an advantage during this process.
One of the most common forms of fraud that occurs is that filers will attempt to hide assets by transferring them to family or purposely leaving them off the filing. Many do this in an attempt to protect their assets from liquidation, which means they will be used to pay off debts to creditors. Though Chapter 13 does not involve liquidation, many will still leave assets out to decrease the overall value of their estate for lower payments.
Another common form of fraud some commit during this process is taking on large amounts of debt shortly before filing in an attempt to avoid paying back what you owe. Unfortunately, many assume this is a way to beat the system without realizing that your bankruptcy trustee will examine your purchases and realize if you are filing in bad faith.
Other examples of bankruptcy fraud include purposely undervaluing assets, gifting friends large amounts of money, and filing in multiple different locations.
Are There Any Potential Defenses?
It’s important to understand that some common errors made during the filing process can result in bankruptcy fraud. As such, ensuring you follow the rules carefully is critical to ensure you avoid any legal issues. However, if you can prove that the alleged fraud is a result of a genuine accident, you may be able to avoid facing charges.
Bankruptcy fraud is a federal offense, which carries up to five years in prison and a fine of up to $250,000.
As you can see, there are many errors that can lead to a fraud charge, and the penalties can be severe. As such, it’s imperative to connect with an experienced attorney who can help guide you through these complex matters to achieve the best possible outcome for your circumstances. At the Jones Firm, PLLC, we understand how frustrating these can be, which is why our firm is committed to assisting you. Contact us today to learn more.
