Bankruptcy Fraud: What You Need To Know While Filling Out Bankruptcy Petitions

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If you seek professional assistance with filling out bankruptcy petition forms, be aware that you need to avoid bankruptcy fraud. This is a very serious crime, one which, if uncovered after your bankruptcy has been declared, will result in stiff penalties and possibly jail time. As you and your paid help fill out your forms, be sure to disclose all of the following and provide documentation for it as well.

Reveal ALL Assets

Concealment of any assets while filing for bankruptcy is definitely bankruptcy fraud. Since all bankruptcy fraud is considered a white collar crime, it is punishable by law. It is in your best interests to reveal all of your investments, your land holdings, your recreational holdings and vehicles, etc. While you may desire to hide some things that you really want to hold onto, you should be aware that a judge may not force you to sell or liquidate everything to pay your debts. It is a common assumption that this is what happens, but in bankruptcy court, as in any other type of court, the judge will decide what happens to your assets, and you may be able to keep more than you thought if you are honest about revealing what you have.

Do NOT Redistribute What You Have

Redistribution arrangements are arrangements whereby you give a large portion of your money or valuables to someone else to hold, note it as a "gift," and once the bankruptcy has cleared, you reclaim your money or property. These arrangements could be between individuals or between companies in the form of partnerships as actual business arrangements to avoid paying taxes or avoid losing the assets. Between individuals this crime is easier to prove, since there is nothing for the other person or persons to gain by the arrangement. It is harder to prove when business partnerships are formed to redistribute what you have, but if it is discovered, you may be prosecuted for fraud, and the aiding partner company may face some legal troubles of their own.

Do NOT "Doctor" Your Documents

All of those documents you need to turn in with your bankruptcy petitions need to be truthful and accurate. If you "doctor" your documents, you are actually placing yourself in perjury in the court, something for which you could be fined and jailed even after your hearing is complete. That would also create enough suspicion around your bankruptcy for a full investigation into your affairs, resulting in possible bankruptcy fraud charges.