When filing for bankruptcy, some unscrupulous individuals may try to forgo looking around Baltimore for a bankruptcy attorney and instead conceal their assets or undertake other shady tactics to avoid paying too much. If you didn’t already know, this is bankruptcy fraud and is highly frowned upon in law and business. In general, bankruptcy fraud is the act of attempting to or succeeding at cheating the court out of paying the full amount called for in the bankruptcy plan. It also involves confusing or disrupting normal bankruptcy processes so that the attorneys, creditors, and other personnel are not able to engage in fair business.
According to the Legal Resource Institute at the Cornell Law Institute, 70% of bankruptcy fraud cases involve concealing assets so that they do not become liquidated. In doing so, they can illegally keep these assets despite owing a debt. These may come in a variety of forms, such as the following:
- Failing to list all properties in the bankruptcy statement
- Concealing a property transfer that occurred before filing for bankruptcy
- Transferring cash, jewelry, or other properties to friends or family
- Falsifying documents submitted to the bankruptcy court
- Destroying important documents relevant to the bankruptcy case
- Concealing assets by paying someone to do so
If a debtor is found guilty of performing any of the above, they may be charged for bankruptcy fraud under US criminal law, outlined in the Criminal Resource Manual of the Department of Justice. This can result in up to five years of jail time and/or a fine of up to $250,000.
Another form of fraud is threatening or blackmailing creditors in any way. If a creditor files a bankruptcy claim against a debtor and the debtor threatens to stop doing business, that counts as a form of extortion. Any dealings done through extortion can be considered fraud as a debtor who extorts creditors interferes with fair business.
So how do you avoid breaking the law when you are faced with bankruptcy charges?
Disclose everything you own. Avoiding jail time is as simple as being open about what properties you own and what payments you have made in the last 5 months. If you have a good bankruptcy lawyer who has worked on cases in Baltimore, Maryland, the payment plan will still be stable and doable even if you have quite a number of assets and properties to your name. Additionally, the disclosure of all your assets, no matter how large, shows that you are an honest debtor and could possibly make the entire bankruptcy process a lot easier.
Be reasonable to your creditors. Whether it is through personal mistakes or a bad patch in life, you need to own up to what you owe and not force your creditors to take up an unfair responsibility. That means you shouldn’t try to extort your way out of a bankruptcy filing or otherwise cheat your creditors out of their fair share of money.
Explain what may not be clear. Even lawyers and creditors can make mistakes. If you see that they may be misconstrued about something, always let them know. This ensures that you don’t accidentally end up concealing information from the court.
For more information on avoiding bankruptcy fraud, it is best to look around Baltimore for a skilled bankruptcy attorney like Attorney Richard Hackerman. His years of experience in bankruptcy and negotiation has made him one of Baltimore’s best. You can visit his office at 3635 Old Court Rd Suite 208, Baltimore, MD 21208, or call him directly at 410-243-8800 or 888-243-5500. Reach out today and get expert assistance with all your legal and financial woes.