Broken piggy bank, handcuffs, and cash.

What Is Bankruptcy Fraud?

Bankruptcy fraud is a serious crime that carries civil and criminal penalties. It is essential to understand what bankruptcy fraud is to protect yourself from accusations of fraud or errors in filing. Our Colorado bankruptcy team goes over what constitutes bankruptcy fraud, the difference between civil and criminal bankruptcy fraud, and how you can best avoid mistakes when filing for bankruptcy.

What Is Bankruptcy Fraud?

Bankruptcy fraud is any attempt to defraud creditors or falsify information on a bankruptcy form. It can include attempting to hide assets, making false statements on documents, or misrepresenting income. It is important to note that an honest mistake when filing for bankruptcy does not constitute fraud—it must be intentional. However, even a simple mistake can have severe consequences and should be avoided if at all possible.

Civil vs. Criminal Bankruptcy Fraud

Civil bankruptcy fraud involves actions that are intended to harm creditors. These actions may include hiding assets or transferring them out of the debtor's name before filing for bankruptcy, making false statements on paperwork, or concealing income from the court to qualify for Chapter 7 protection instead of Chapter 13 repayment plans. Civil violations can result in the dismissal of the case and fines of up to $500,000.

Criminal bankruptcy fraud involves more serious offenses such as lying under oath during a deposition or perjury while filling out paperwork, concealing property with intent to defraud creditors, embezzlement of funds during the course of a case, bribing witnesses to gain an advantage during proceedings, or attempting to tamper with evidence by destroying documents pertinent to the case. Criminal violations can result in jail time and fines up to $250,000 per count, plus restitution paid back to creditors affected by the crime.

How To Avoid Mistakes When Filing For Bankruptcy

You must hire an experienced attorney specializing in bankruptcy law if you are considering filing for bankruptcy protection. A knowledgeable attorney will help guide you through the process and ensure that all necessary documentation is filed correctly so there are no errors or misunderstandings that could lead to accusations of fraud down the line. An experienced lawyer will also be able to provide advice on how best to structure your debt payments so that you can get back on solid financial footing as quickly as possible after declaring bankruptcy.

Let Wagner Law Office, P.C. Guide you Through the Bankruptcy Process

It goes without saying that the bankruptcy process can be complex and confusing. That’s why our Colorado bankruptcy team is here to help. Our knowledgeable attorneys have experience representing individuals and businesses in a full range of bankruptcy matters, so you can trust that your case is in good hands.

If you need help filing for bankruptcy, we can help. Don't hesitate to contact us today through our website or give us a call at (303) 536-5124 to schedule a consultation.