If you accidentally make a mistake on your bankruptcy forms or forgot an asset, it may delay your case, but it won’t send you to jail or get you fined. However, if you intentionally leave out assets or other information that impacts your case, you can be found guilty of bankruptcy fraud. This is a very serious charge. If your creditors discover you lied, they can sue you. Worse, if you committed major fraud, you may even find yourself facing criminal charges.
What Is Defined as Bankruptcy Fraud?
Bankruptcy fraud does include lying about your assets, but that’s not all it includes. If you buy items on credit right before you declare bankruptcy with the intent of having that debt discharged, it’s also considered fraud. Another way of committing bankruptcy fraud is to sell off some of your assets to others for very little money just so you don’t have to include them in your asset inventory. While most fraud tries to hide assets, it’s also a crime to report more assets than you have or say that you make more money than you do.
Civil Penalties
If you commit bankruptcy fraud, there are a few different consequences you may face in civil court. First, your bankruptcy case may be dismissed immediately. The judge may also restrict you from filing bankruptcy for a specific amount of time. The court can also refuse to discharge some debts, such as credit card debt you built up with the intention of not paying it. Finally, the bankruptcy court does have latitude in how they punish you, including fines.
Criminal Penalties
While most individuals will not be prosecuted for bankruptcy beyond civil cases, if you create a large bankruptcy fraud plan, it is possible to be brought up on criminal charges. These charges are typically investigated by the FBI and prosecuted by the Department of Justice. They can include everything from jail time to hundreds of thousands of dollars in fines.
If you want to avoid bankruptcy fraud, you need a lawyer on your side who will make certain your case follows all rules and regulations. The team at Michael F. Kanzer & Associates can help guide you through bankruptcy. Contact us today to arrange for a free consultation.