What to Look for in Bankruptcy Fraud
Bankruptcy is a way for individuals and businesses to legally dispose of debt without having to pay all or only portion of that debt to the creditors because of insolvency. There are different types of bankruptcy. The type filed determines their stipulations and the conditions. Bankruptcy is an option that gives individuals and businesses an opportunity to start over financially when unforeseen circumstances develop such as extremely high and unexpected medical bills or businesses that have not been able to survive, financially, for some reason.
When filing a bankruptcy petition through the Court, the petitioner must give information in writing. This information includes many things such as a list of all of their debt and a list of all their assets. The Court goes by this information for the processing of the bankruptcy. It needs to be accurate. The petitioner needs to be honest.
Individuals and businesses need to pay close attention to whom they trust when they go to file bankruptcies. They need to have licensed professionals such as attorneys handling the process. Checking with the Better Business Bureau will help insure that the petitioners are dealing with a legitimate entity.
Bankruptcy is filed as a last resort to overcome financial burdens that are impossible to be resolved in any other manner. There are many who are willing to lie to keep what they can. Unfortunately, there are many scams out there for the honest and hard working.
According to Cornell University, bankruptcy fraud can occur when the petitioner tries to hide some of their assets or funds, submit or file their petition in many states or file false or incomplete statements. In other words, the petitioner purposely does not list certain assets that they own because they do not want to loose them to their creditors. They give them to someone for safe keeping. They might hide their unreported funds, possibly in an offshore account. If the petitioner files in more than one state, it will slow down the bankruptcy process and is usually done to hide their assets or funds. False or incomplete statements might be filed by a fake and so called financial advisor, who scams the petitioner out of monies that they have charged them for their services. This entity is called petition mills. By the time the petitioner realizes what has happened, they are in worse financial shape than before.