Different Types of Bankruptcy Fraud
The main point of this article about the different existing types of bankruptcy fraud is to continue to show people some aspects that they might not have paid sufficient attention to and to generally educate those who are in need. So basically, bankruptcy, by its primordial definition, represents a declared debtor (either by his creditors or on his own) legally insolvent and absolutely unable to continue his business. What usually happens next is his property being erased and spread among the companies or individuals that credited him in order to return their money. This is the only way in such a situation that can be pursued in order to make that person or business pay the debts. However, when talking about bankruptcy fraud, than there is a slightly different point of view. There is an interesting approach towards this kind of method that is being practiced by those who commit this type of illegalities. The process which usually consists from that act of doing fraud by claiming bankruptcy is when a debtor does it on purpose (claims bankruptcy) and immediately attempts to get back his assets by firing up petition mills or other various claims. This is what you should folks be aware of, this is what bankruptcy fraud is all about. Authorities regard it as a very serious federal offense.
The different types of bankruptcy fraud are:
1. Multiple bankruptcy filings
2. Concealment of certain assets
3. Petition mills
Multiple Filings
Did you ever noticed individuals filing for bankruptcy in multiple states? If you did, then you probably witnessed our first type of bankruptcy fraud which is represented by filling and insisting on multiple filings. There is no special secret about doing this. What usually makes this possible is the use the real information and the name of a person, including their SSN (Social Security Number) in one state, false names and information in the next one, possible combination of both in the third state, so forth and so one. This is how they file multiple bankruptcy claims. What really happens is the filers tend to present exactly the same assets written on each fraudulent claim, but intentionally “forget” to include every existing asset. Do you get the idea? This is similar to the next type of bankruptcy fraud that we are going to talk about called the concealment of assets, but done in a slightly different manner. In such a way they manage to fraudulently protect their valuables from dissolving when all the necessary debts are returned back.
Concealment of Certain Assets
This type of bankruptcy fraud, commonly known as concealment of assets, basically represents approximately 70% of all the existing fraudulent cases of bankruptcy filed by individuals. It usually occurs when a citizen fails to present, on purpose of course, every one of the available assets, on his written bankruptcy claim. By doing that, he basically “protects” himself from creditors who can liquidate all he has. The person who is committing this type of federal offense is aware of the fact that it is impossible for a creditor to eradicate something that he or she is simply not aware of. So, in such a manner, those owners of businesses often conceal certain assets when doing their filing for bankruptcy, by simply “transferring” their real estate (properties) or funds (monies) to the name of their friends, relatives or associates. In such a way, the above mentioned assets cannot be simply confiscated. Do you get the idea? Do you guys understand how merely 70% of all occurring bankruptcy cases take place?
The last but not the least – Petition Mills
If you have heard about those schemes that are intentionally created in order to give a hand in maintaining those financially chained holders away from dispossession than you have probably stumbled upon the so called petition mills. Their popularity are rising nowadays especially in the United States of America and mostly in those poor neighborhoods with a high level of immigrant population. It all starts when a rental property owner calls the telephone number on the ad he recently “saw” in a popular local listing newspaper or even a poster where a certain services related to eviction avoidance is advertised. But how does this scheme work anyway? Very simple – without telling the holder of the rental property what is this all about, the service that we have mentioned above (might be a company or an individual) files bankruptcy in the name of the owner. What happens next is basically a huge charge or various fees, a process which drags the case away for several entire months, sometimes even a year. The scheme works this way. The tenant usually is not aware that his whole savings are being directly drained and continues to think that he simply gets the much awaited help. By running the credit of an owner, the service that was advertised in that newspaper is basically postponing the inevitable eviction. So please ladies and gentlemen, stay away from those not so good looking advertisements that you usually see in the newspapers and you are going to be safe and stay away from this type of bankruptcy fraud called petition mills.
Even if the punishments for bankruptcy fraud are quite severe (and we are going to talk about that in a separate post), people continue to commit them, if not so often, than once in a while for sure. Bankruptcy fraud is considered to be a felony. Don’t even try to do it if you don’t have a clue how to get away because you are going to get in prison minimum for five years or end up with a bill of $250k United States dollar bills. However, those who defend themselves against such charges always have the right to get a criminal law attorney; after all, we are living in a ever growing democracy, aren’t we?