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Bankruptcy Fraud Could Bring Jail Time, Fines

When a debtor tries to hide assets or lies about money, property, gives false information and is caught in federal bankruptcy court a qualified bankruptcy fraud attorney should be hired to provide additional legal counsel.

If you’re found guilty of bankruptcy fraud, it can bring five years in jail followed by three years of supervised release and a $250,000 fine.

A debtor charged with falsifying information on a bankruptcy petition can be charged and can be denied the ability to file bankruptcy. In general while filing bankruptcy in Florida or anywhere else, no one wants assets seized to pay outstanding debts. There is a tendency to try to hold onto as much property and disposable income as possible.

However, there are very clear bankruptcy property, home and asset exemptions and allowances. What happens is that almost all fraudulent cases involve debtors who try to hide assets from being liquidated to satisfy creditors.

A bankruptcy attorney who works with a client who lies is not held responsible for filing incorrect or untrue paperwork. A person who deliberately falsifies information is responsible. Debtors sign the bankruptcy paper before they are filed stating that all information provided is true and that it is completed accurately. The bankruptcy attorney only knows what the debtor tells them.

What occurs usually is that the bankrutcy trustee finds discrepancies or sees assets after some initial investigation. If a trustee feels a debtor has hidden finances, the investigation is launched. If bankruptcy fraud is detected the penalty is imprisonment and fines.

Chapter 7 bankruptcy and Chapter 13 bankruptcy petitioners, as well as Chapter 11 business filers, have been found guilty of hiding funds, assets and property from the federal government.

What is Bankruptcy Fraud?
Fraudulent practices include:

  • Transferring real property
  • Transferring large sums of money to children or relatives
  • Filing multiple cases in different states to avoid paying creditors
  • Using stolen Social Security numbers and identities to open bank accounts under assumed names

Bankruptcy fraud has increased the review of all bankruptcies. Many individuals desperately need the debt relief afforded by the bankruptcy court system to re-establish their financial futures. The criminal action of a unscrupulous consumers can jeopardize the rights of many.

Because of fraudulent bankruptcies, this form of consumer debt relief has gotten a bad reputation and caused legislators and lending institutions to feed debtors to advocate stringent bankruptcy reforms. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was legislated to prevent and penalize consumers and businesses filing fraudulent cases.

Fraudulent bankruptcies cost creditors, government, taxpayers, creditors and debtors hundreds of thousands of dollars annually. The severity of the reforms have forced bankruptcy fraud attorneys, debt-relief agencies, petition preparers, creditors and debtors alike to take a good hard look at alternatives to traditional asset protection efforts.

Additionally individuals have to spend more in bankruptcy legal fees for lawyers willing to defend and handle cases.

Filing bankruptcy is a serious undertaking and deciding on an attorney should include a careful review of qualifications. In order to select the best Florida bankruptcy attorney to defend a bankruptcy fraud case, look at one who handles personal and corporate bankruptcy which Eric Lanigan and Roddy Lanigan practice.

Their bankruptcy fraud attorney’s education and experience should demonstrate the ability to adeptly manage the case while providing clients in this challenging situation, the in-depth representation needed.

When you meet with the Lanigans for an initial bankruptcy consultation, debtors can relax. There will be a questionaire provided when you leave so that the next time that you meet you will have paperwork and will be well prepared.

Don’t walk into any lawyer’s office empty-handed and missing information on your paperwork and forms. You have the account numbers, the amount of money due, and all of your financial history. Furnishing financial information should provide a clear picture of your financial status.

So before you come in to show the Lanigans your paperwork, save time and hourly legal fees, and arrive on time. Take the time needed at home to prepare strong financial statements, including all assets and liabilities, a list of creditors, federal and state income tax returns, home mortgage balances, auto loan payments, and outstanding credit card debt.

During all consultations, you should be as honest and forthcoming as possible. Don’t try to hide assets or information which you feel may be detrimental to your bankruptcy case. It does you no good to hire bankruptcy lawyers Roddy Lanigan and Eric Lanigan and then attempt to conceal information that might result in a charge of fraud and jeopardize your own chances of filing bankruptcy and face jail time. The more information you share, the better prepared the Lanigans will be before facing creditors, trustees and the judge during the actual proceeding.

In the event that you are charged with filing bankruptcy fraud, your first step will be to find and hire a good bankruptcy fraud attorney. You may want to consult with the lawyer who first represented you in the original proceeding.

But if the original bankruptcy attorney is not willing or able to take the case, they may recommend someone skilled in defending fraudulent claimants. The bankruptcy fraud attorney must feel confident that the accused debtor is innocent of charges; and the debtor must feel that the attorney is going to provide a vigorous, targeted defense. In order to dispute charges of fraud, debtors should give the Lanigans full disclosure of their personal and business finances, paying special attention to the court’s concerns.

In turn, the Lanigans will offer realistic expectations of outcomes and prepare debtors to address any indescrepancies, questions or concerns the court may have. Compiling amd providing accurate and honest fiscal information will provide sufficient ammunition to build a solid case in defense of an innocent, but hopefully wrongfully accused debtor.

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