Bankruptcy fraud in Miami arises when a person intentionally omits or makes changes to their bankruptcy filing considered fraudulent. While bankruptcy does involve a considerable amount of paperwork, it is possible mistakes may occur. Some of those mistakes are innocent ones. Others, however, are not so innocent. Regardless of what the individual may have been thinking, if there are mistakes made there is a risk of receiving criminal charges.
Bankruptcy Fraud is described under Federal Statute 18 USCA § 157 as having the intention of designing a plan to commit fraud. Common types of Bankruptcy Fraud include Concealment of Assets, Petition Mills, and Multiple Filings.
With a bankruptcy filing, you are required to list all of the properties you currently own, as well as any assets you have sold to others within a given period. If you deliberately omit the correct details when filling out your bankruptcy papers, or use the bankruptcy process improperly to keep creditors from collecting money to which they may otherwise be entitled, you could be found guilty of fraud.
While most people who file for bankruptcy report their assets accurately and transparently, this isn't always the case. The filer risks accusation of bankruptcy fraud when someone succumbs to the temptation to try and conceal property. Some examples of acts that will possibly be considered fraudulent if they are intentional include:
- Failure to place an asset on the correct bankruptcy timetable so that it is not sold to benefit a creditor.
- Disguising a transfer of property that occurred prior to the bankruptcy (i.e.: failure to report a friend's gift of a car).
- Presenting a bankruptcy court or trustee with a fraudulent document.
- Using an untrue statement in the bankruptcy papers or to the insolvency trustee at a 341 creditors' meeting.
- Providing someone money to assist with hiding property from the court.
The most common type of criminal bankruptcy fraud is often hiding or concealing assets, or otherwise trying to keep the bankruptcy court from finding out exactly what the debtor owns. The court must collect all of your properties as you apply for bankruptcy and bundle it into what is called a bankruptcy portfolio. Court officials use this information to decide how much you can pay to your creditors as part of a potential repayment agreement, or how much you can afford to pay them. Often people may attempt to conceal property from the court to discourage the court from using it to pay out creditors or try to disguise what they can pay as part of the repayment plan.
Bankruptcy fraud may also occur when a debtor tries to bribe a creditor. When a debtor files for bankruptcy, creditors are not able to lodge a lawsuit against the debtor. For example, if the creditor decides not to file a claim, the debtor may try to persuade a creditor not to file a claim by providing a cash payment.
Fraud involving bankruptcy may be disciplined with either civil or criminal penalties. If a person files for bankruptcy, a bankruptcy trustee (an individual overseeing the case) is named by law. Should the trustee suspect that the debtor has committed dishonest acts, the court may be asked to impose civil penalties.
However, depending on the severity of the fraud, the trustee may present the case to federal prosecutors. They can then investigate the allegation and file criminal charges against the debtor, potentially resulting in penalties such as imprisonment or fines.
It is not possible to commit bankruptcy fraud by mistake. For instance, if you mistakenly forget to tell the bankruptcy court about the classic car that your parent gave you because he stored it in his garage and you never possessed it physically, this would not be considered bankruptcy fraud. Criminal fraud means intentionally deceiving the court, hiding properties or knowingly performing dishonest acts.
The general information provided above about bankruptcy fraud in Fort Lauderdale is meant for educational purposes only and is not a substitute for speaking directly with an attorney about the facts and circumstances of your case. Please call 954.500.0003 in Broward or 305.674.0003 in Miami to schedule a consultation with the Law Offices of Mark Eiglarsh.