Forms of Bankruptcy Fraud

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Debtors will often go to the extreme in order to clear their names of debt. This often means committing bankruptcy fraud in an attempt to clear debt, or make money. Bankruptcy fraud is considered a white-collar crime that carries very serious consequences and federal prosecution. If you are desperately trying to get out from under extreme debt, contact a phoenix chapter 7 bankruptcy lawyer that can help you explore your options.

Forms of Bankruptcy Fraud

There are four standard forms of bankruptcy fraud:

  1.  Debtors conceal assets to avoid having to forfeit them,
  2. Individuals intentionally file false or incomplete forms,
  3. Individuals file multiple times using either false information or real information in several states, and
  4. Bribery of a court-appointed trustee.

Typically, bankruptcy fraud will not fall within just one form, but will combine one or more of the above with identity theft, mortgage fraud, money laundering, or public corruption.

Charges for Bankruptcy Fraud

Bankruptcy crimes are not actually prosecuted in the bankruptcy court, but rather are prosecuted by the United States Attorney in the Federal Courts.

If a bankruptcy trustee suspects bankruptcy fraud is occurring, the trustee will make a criminal referral to the Office of the United States Trustee. The case and investigation is then passed along to the United States Attorney, the Federal Bureau of Investigation, or other appropriate federal agency.

Federal prosecutors are able to bring charges for suspected bankruptcy fraud under 18 U.S.C. § 151. To prove that fraud has occurred, prosecutors must show that the defendant knowingly and fraudulently made a misrepresentation of material fact. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both.

Working with a Bankruptcy Attorney

Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 7 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.

AZBK Lawyers 668 N. 44th St., Ste 320, Phoenix, AZ 85008 (602) 648-3274

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