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How to Avoid Bankruptcy Fraud in CA

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Bankruptcy fraud is an incredibly serious allegation. The consequences for bankruptcy fraud can range from simple denial of the bankruptcy discharge all the way to felony criminal charges, depending on the nature and severity of the conduct. If you are planning to file for bankruptcy, it’s important to follow all appropriate steps and adhere to all relevant requirements, engaging in a practice of full and complete disclosure along the way. Attempting to hide assets or otherwise outwit the bankruptcy trustee or bankruptcy court is likely to lead to unnecessary legal troubles. Below, we offer some tips on how to avoid charges of bankruptcy fraud. If you are considering bankruptcy in California, call a seasoned Ventura debt relief and bankruptcy attorney for advice and assistance.

Common Types of Bankruptcy Fraud

There are a number of different ways in which a debtor can commit bankruptcy fraud. For individual debtors, the most common forms of bankruptcy fraud are as follows:

  • Hiding assets. Filing for bankruptcy requires full disclosure of all of your assets. Any steps you take to shield assets from discovery by the court or trustee can derail your bankruptcy and/or be considered fraud. It’s very common for debtors
  • to try to hide assets by, for example, giving or loaning them to friends or family shortly before or after filing; this is unlawful and can lead to criminal charges.

  • Intentionally falsifying forms. Filling out bankruptcy forms is a long, involved, complex, and often tedious process. However, it’s your responsibility to fill out the forms as completely and accurately as possible. Your lawyer will assist you
  • throughout the process. If you have questions about unclear aspects of the form, talk to your lawyer. If you make a mistake, let your lawyer know so that they can tell the trustee. Intentionally leaving out information or intentionally filling in false information can subject you to significant liability.

  • Multiple bankruptcy filings. You may be committing bankruptcy fraud if you file multiple bankruptcy cases with different information, or if you file in multiple different jurisdictions (such as across multiple states). If you need to file
  • multiple cases consecutively, you must adhere to the legal time limits for filing multiple cases.

  • Credit card fraud. Some debtors think they can get away with racking up a bunch of debt just before filing for bankruptcy, such as by loading up multiple credit cards, knowing that their debt will soon be discharged. Bankruptcy trustees know
  • how to identify unusual spending habits in the months leading up to a bankruptcy filing. If they determine that you intentionally incurred significant debt, planning to never pay it back, you could have your bankruptcy denied and you might be subject to fraud charges.

If you are filing for bankruptcy, avoid committing any of these illegal actions. Engage in a practice of full disclosure and work with your bankruptcy lawyer every step of the way. There’s no sense in derailing your bankruptcy or opening yourself up to additional, unnecessary liability.

Avoiding Bankruptcy Fraud in California

The best way to avoid bankruptcy fraud charges is to ensure that you are honest, forthright, and thorough at all steps of your bankruptcy proceeding. From the date of your filing until the date of your discharge, do not try to hide anything from the trustee or the court. Adhere to the advice of your bankruptcy attorney along the way. As long as you are being honest and forthcoming, you should not have to worry about being charged with actual fraud (which requires deliberate intent to defraud).

In addition to full disclosure generally, some best practices to keep in mind include:

  • Do not transfer assets shortly before or during bankruptcy in order to shield them from collection.
  • Be accurate on every form you fill out and document you provide. Triple-check your forms for errors.
  • Wait to sign your bankruptcy filings until you’ve gone over them with your bankruptcy attorney.
  • Disclose all assets, holdings, savings, income, credit, and debts where appropriate on your bankruptcy filings. Even minor loans must be reported.
  • If you see something that looks off, talk to your attorney; you might identify something they overlooked.
  • You can always contact your bankruptcy trustee to address any concerns or correct any errors you identify after filing.

Protect Your Future and Find Financial Freedom With Help From a Compassionate Southern California Debt Relief Attorney

If you are dealing with mounting debt and considering debt relief options including bankruptcy, please contact Rounds & Sutter for a free, confidential consultation. With offices in Ventura, Santa Barbara and Westlake Village, we represent clients throughout Southern California, offering tried & true legal counsel in the face of life’s challenges.