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Bankruptcy Fraud Charges in Plano

When it comes to personal bankruptcy, most individuals and couples file either Chapter 7 or Chapter 13 bankruptcy. The process of filing bankruptcy involves a lot of paperwork, and debtors are required to provide details about their personal income and debts.

Like mortgage loan applications, credit card applications, and applications for immigration and government benefits, there is room for fraud when people file bankruptcy.

When a debtor takes measures to conceal their assets, or when they file multiple bankruptcies in different states, or when they try to bribe a bankruptcy trustee, they commit “bankruptcy fraud.”

Bankruptcy fraud is a type of white- collar crime, and it comes in these basic forms:

  • Concealing assets from the bankruptcy court
  • Intentionally filing false forms
  • Knowingly filing incomplete forms
  • Filing multiple times in different states and providing real or false information
  • Trying to bribe a court-appointed bankruptcy trustee

Often, when a debtor commits bankruptcy fraud, he or she will commit one of the above forms of fraud while committing another type of fraud, such as mortgage fraud, identity theft, or money laundering.

Of the different types of bankruptcy fraud, the most common type is “concealment of assets.” In bankruptcy, creditors can liquidate a debtor’s assets in order to pay off debts. However, only those assets listed by the debtor can be liquidated.

So, a fraudster will go to great lengths to conceal assets so they remain inaccessible by creditors. To conceal one’s assets, a debtor may transfer them to friends or relatives so they cannot be found by the bankruptcy court.

Bankruptcy Fraud is a Federal Crime

Bankruptcy fraud is a federal crime under 18 U.S. Code § 151 and 18 U.S.C. § 152, and is punishable by up to a $250,000 fine, or up to five years in federal prison, or both.

Are you accused of committing bankruptcy fraud? Contact our firm today to meet with a Plano criminal defense attorney!