Bankruptcy Fraud

Law Office of John Bristol - 1776 N. Pine Island Road, #224, Plantation, Florida 33322 (954) 475-2265

Since 1988, Fort Lauderdale Bankruptcy Attorney Center of John Bristol has filed more than 5,000 consumer Chapter 7 Bankruptcy and Chapter 13 Bankruptcy Cases in the Fort Lauderdale area (the Southern District of Florida). As a Fort Lauderdale Bankruptcy Attorney; John concentrates his Bankruptcy law practice only in Broward County. We offer PAYMENT PLANS and give FREE CONSULTATIONS (954) 475-2265

Nearly 70% of all bankruptcy fraud involves the concealment of assets. Hiding assets that would normally be required to be turned over for sale constitutes bankruptcy fraud. 

Creditors can only liquidate those assets listed by the debtor; thus, if the debtor fails to reveal certain assets, the debtor can keep the assets despite having an outstanding debt. To further conceal the assets, businesses or individuals may transfer these hidden assets to friends, relatives, or an associate so that the asset cannot be located. This type of bankruptcy fraud raises the risk and costs associated with lending and becomes passed on to others who wish to borrow money.

Petition mills are one type of bankruptcy fraud scheme on the rise in the United States. Petition mills purport to keep financially-strapped tenants from becoming evicted by passing themselves off as a consulting service. While the tenant believes to be receiving help in avoiding eviction, the petition mill actually files the tenant for bankruptcy and drags out the case. Meanwhile, the “service” charges exorbitant fees, empties the tenant’s savings account, and ruins the tenant’s credit score.

Multiple filing fraud consists of filing for bankruptcy in multiple states, using the same name and information, using aliases and fake information, or some combination thereof. Multiple filings slow down the court systems’ ability to process a bankruptcy filing and liquidate the assets. Often, multiple filings provide more cover for a debtor trying to engage in the concealment of assets.

A proceeding in which suspects are charged with bankruptcy fraud is criminal in nature. Federal prosecutors can bring charges for suspected bankruptcy fraud under the bankruptcy code. Proof of bankruptcy fraud requires showing that the defendant knowingly and fraudulently made a misrepresentation of material fact. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both.  For more information see Cornell.Edu

 

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Fort Lauderdale Bankruptcy Attorney John Bristol has filed more than 10,000 Bankruptcy cases in Florida since 1988. We concentrate Now our law practice on Chapter 7 Bankruptcy (liquidation) and Chapter 13 Bankruptcy (personal reorganization) cases in the Fort Lauderdale and Broward County area

Once the trustee has gathered enough evidence to support a case, the trustee can file a lawsuit against the appropriate party. Under most circumstances, the trustee will file the lawsuit in the bankruptcy court -- this is called an adversary proceeding.

Comparison to lawsuits generally. Adversary proceedings are similar to lawsuits filed in other courts but proceed to trial much more quickly. The trustee can serve the initial pleadings -- the summons and complaint -- by first class mail. This eliminates the need to chase down someone who is avoiding service. The trustee can sue anyone in an adversary proceeding, not just debtors and creditors. When the trustee finds fraud, adversary proceedings can be used to set aside fraudulent transfers (transfers for less than full value) and recover the property from the person or entity who received the transfer (learn more about prebankruptcy transfers of property) obtain turnover of hidden or undisclosed property from whoever is in possession of the property; object to or revoke the discharge of a bankruptcy debtor who has hidden assets or attempted to transfer assets out of the reach of the trustee; recover property from employees or officers who have wrongfully taken assets of businesses in bankruptcy; recover property that has been wrongfully seized by creditors; determine the validity, priority, and extent (amount) of liens fraudulently placed on bankruptcy assets, and recover money from people who have used their bankrupt business to operate a ponzi scheme.

In cases where the trustee has sufficient evidence to show that the assets that the trustee is attempting to recover are being depleted or further transferred, and that
Bankruptcy fraud is a white-collar crime that takes four general forms. First, debtors conceal assets to avoid having to forfeit them. Second, individuals intentionally file false or incomplete forms. Third, individuals sometimes file multiple times using either false information or real information in several states. The fourth kind of bankruptcy fraud involves bribing a court-appointed trustee. Commonly, the criminal will couple one of these forms of fraud with another crime, such as identity theft, mortgage fraud, money laundering, and public corruption.

A person who, having devised or intending to devise a scheme or artifice to defraud and for the purpose of executing or concealing such a scheme or artifice or attempting to do so: (1) files a petition under title 11, including a fraudulent involuntary petition under section 303 of such title;
(2) files a document in a proceeding under title 11; or (3) makes a false or fraudulent representation, claim, or promise concerning or in relation to a proceeding under title 11, at any time before or after the filing of the petition, or in relation to a proceeding falsely asserted to be pending under such title, shall be fined under this title, imprisoned not more than 5 years, or both.

Bankruptcy trustees take fraud very seriously. If the bankruptcy trustee suspects fraud, what the trustee will do depends on: the specific facts of case, who is suspected of fraud, and the type of fraud being committed. If the trustee suspects fraud but does not have sufficient evidence to bring the matter before the court, the trustee can compel testimony and document production from just about anyone, anywhere, through a Bankruptcy Rule 2004 examination. The scope of the examination allowed is broad enough to include any action that could be considered fraud in a bankruptcy case. Bankruptcy Rule 2004 authorizes the bankruptcy trustee to examine the acts, conduct, property, liabilities or financial condition of the debtor any matter which may affect the administration of the bankruptcy estate, or any matter which may affect the debtor's right to a discharge.

 

 

Law Office is on the Corner of Sunrise Boulevard and Pine Island Road

From I 95: Take Sunrise Boulevard West to Pine Island Road

From I 595: Take Pine Island Road North to Sunrise Boulevard

1776 N. Pine Island Road, #224

Plantation, Florida 33322

Nearly 70% of all bankruptcy fraud involves the concealment of assets. Creditors can only liquidate those assets listed by the debtor; thus, if the debtor fails to reveal certain assets, the debtor can keep the assets despite having an outstanding debt. To further conceal the assets, businesses or individuals may transfer these unrevealed assets to friends, relatives, or an associate so that the asset cannot be located. This type of fraud raises the risk and costs associated with lending and becomes passed on to others who wish to borrow money.

Petition mills are one type of bankruptcy fraud scheme on the rise in the United States. Petition mills purport to keep financially-strapped tenants from becoming evicted by passing themselves off as a consulting service. While the tenant believes to be receiving help in avoiding eviction, the petition mill actually files the tenant for bankruptcy and drags out the case. Meanwhile, the “service” charges exorbitant fees, empties the tenant’s savings account, and ruins the tenant’s credit score.

Multiple filing fraud consists of filing for bankruptcy in multiple states, using the same name and information, using aliases and fake information, or some combination thereof. Multiple filings slow down the court systems’ ability to process a bankruptcy filing and liquidate the assets. Often, multiple filings provide more cover for a debtor trying to engage in the concealment of assets.

A proceeding in which suspects are charged with bankruptcy fraud is criminal in nature. Federal prosecutors can bring charges for suspected bankruptcy fraud under 18 U.S.C. § 151. Proof of fraud requires showing that the defendant knowingly and fraudulently made a misrepresentation of material fact. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both. See 18 U.S.C. § 152.

While a vast majority of people declaring bankruptcy are honest individuals, there will always be some people who will stop at nothing just to find some loopholes to abuse the system in order to use credit cards even more, with the intention of not repaying the money they are using. Also, some people use this as a means of getting out of debt as a result of their fraudulent acts. Individuals who are a victim of this fraud can seek help from a trusted and professional bankruptcy attorneys Nashville TN.

So what exactly are actions that constitute bankruptcy fraud? Basically, there are several types of bankruptcy cases around, but these still hold the same definition of fraud. It generally considers four actions to be fraudulent: first, when debtors try to hide their various assets so that they will not have to give them up; second, when they try to file falsified or incomplete forms deliberately; third, when these people try to file for bankruptcy multiple times while using either their real information or fabricated data in different states; and lastly, when they try to bribe the bankruptcy trustee. Still, it is more common for people to involve any of the four actions with another criminal activity, like the nefarious identity theft, money laundering, corruption and mortgage fraud.

Among these four actions, more or less three-fourths of the bankruptcy fraud cases will involve debtors trying to hide away some of their assets from the court. The reason for this is that once the bankruptcy case proceeds, creditors are only given the chance to liquidate the assets that the debtor provided. The goal of deliberately neglecting to give information about some assets is to save them from getting liquidated to pay for their debts. Most of them will take even more precaution and transfer these undisclosed assets to the people they trust, like friends or family members in order to make sure that the assets will never be traced.

On the other side of the story, petition mills, a type of bankruptcy fraud scheme, is gaining more popularity in the United States. Basically, petition mills target various financially challenged individuals—especially those who are in danger of getting evicted from their home—by posing as an agency that offers consultation services. These people are being driven by the belief that they are receiving aid to save them from eviction, but in actuality, the petition mill is filing for the individual’s bankruptcy, dragging out the case for as long as possible. They will then charge their victim with large service fees, all the while ruining their credit score and siphoning away all their savings.

Another kind of fraud is called the multiple filing fraud. As its name implies, this scheme is done when an individual files for bankruptcy in several states with the use of his own name and information, or with aliases or falsified information. Some people might even use a combination of the two. It is very harmful to the court, since it will certainly slow down the system’s capability in processing bankruptcy cases, as well as the liquidation process. Actually, most debtors who want to cheat the bankruptcy court will use this tactics in order to buy them more time to cover up their assets.

The reason why concealing assets fraud increased significantly through the years is because of the fact that the bankruptcy laws became stricter in its terms. Basically, with the implementation of the new law, debtors will not be able to get debt relief through Chapter 7 bankruptcy if their disposable monthly income is greater than 183.50 dollars. Therefore, that will force them to file for a Chapter 13 bankruptcy instead.

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  • Fort Lauderdale Bankruptcy Attorney Center US
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The Law Office of John Bristol, 1776 N. Pine Island Road, #224, Plantation, Florida 33322 is a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.  Disclosure: The hiring of a lawyer is an important decision that should not be based solely on advertising.  Before you decide please ask us for information concerning out qualifications and experience

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