The Legal Services You Need. The Price You Can Afford. Your Hometown Lawyer.

Don’t let your bankruptcy lead to fraud charges

On Behalf of | May 3, 2024 | Chapter 7

When filing for Chapter 7 bankruptcy, debtors must be very careful not to omit any debts or do anything that the court or trustee could perceive as fraudulent actions. Should that occur, your financial troubles could morph into criminal charges.

Nobody wants that. Read on to learn of some common bankruptcy problems that could get you criminally charged or cause your debts not to be discharged.

Committing perjury on your petition

When filing your Chapter 7 bankruptcy petition, you must be truthful about all assets and resources you own. Omitting any from your list could be quite detrimental to you and your case.

Transferring assets to others

Some people think that they can move assets around to family or friends prior to filing for Chapter 7. Then once their debts get discharged, they plan to take over ownership. But the courts and trustees are wise to this common scheme and will likely ferret out the truth leaving you open to allegations of fraud.

Running up debt before filing

It’s excusable to use your credit cards to cover necessary purchases like groceries, rent, utility bills and other basic living expenses when you’re struggling to get by in the months before filing for bankruptcy. But don’t think that you’ll get away with maxing out your credit cards on luxury purchases or exotic vacations. You won’t.

Becoming a serial filer

Some people think they can go through life running up debts they have no intention of paying because they repeatedly get them discharged through bankruptcy. While there are circumstances that allow for filing for Chapter 7 bankruptcy more than once, using it to flout your financial obligations is unwarranted.

Take your bankruptcy seriously

If your financial situation has become untenable, take the bull by the horns and learn all you can about your rights and responsibilities under the law regarding filing for Chapter 7 bankruptcy.