What Is Bankruptcy Fraud ?
These days, words like bankruptcy and bankruptcy fraud have become synonymous with debt and recession. Everyone you know is filing a bankruptcy claim, and it has become very difficult to identify who is having real problems. However, as per the United States Laws, bankruptcy fraud is a crime. Bankruptcy is a legal process meant to help people who have debts. If a person has several debts and is clearly unable to pay, they can approach the court and file for bankruptcy.
There are many types of bankruptcy and committing bankruptcy fraud also. Among them three types of bankruptcy fraud are most common.
The concealment of assets is the most common type that everyone undertakes. It is easy for any person to hide their assets or transfer them on to other family members' name and declare bankruptcy. Another method is by filing multiple claims of bankruptcy. The same person files from different states, and also files the same assets. The hidden ones are not filed. Another way is through petition mills. This type is more applicable to tenants who want to avoid an eviction notice. However, the eviction notice only gets delayed in this type of bankruptcy fraud.
Bankruptcy fraud is a punishable crime by the federal government. The fines can go up to $250,000 or five years of prison. Even under bankruptcy fraud, most people are directed to repay their debts. No debts are actually written off. Instead the debtors are given more allowances. As long as a person is showing an income, they will have to pay off their creditors.
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