What is bankruptcy fraud and how do you know when it is happening? The understanding of fraud may differ under each of the varied jurisdictions. Below are basic ways in how to recognize bankruptcy fraud and how to avoid it if you find yourself in an uneasy situation:
• When Forms are Incomplete or Misrepresented and False
Incomplete forms can be an honest mistake but can also be an indication of fraud especially when the forms are missing vital information that determines status. Misleading and falsely filled in forms are always seen as an indication of fraud and is considered a white collar crime. What does it mean be providing misrepresented and misleading or false information? By intentionally providing documents with a fake identity, wrong address, or by not providing all background information about finances and assets, is considered against the law and one of the ways to determine bankruptcy fraud.
• Filing Multiple Forms in Different States
Intentionally filing bankruptcy claims in multiple states and perhaps under different names is also a sign of fraud. As information is often kept in a computer database, those who file forms in different states risk being charged. Always be aware of when and where you filed and follow up on that claim rather than filing again in another state to avoid the mess and drama.
• Hiding Assets
One of the most common ways of bankruptcy fraud is the hiding of assets, especially liquid assets in other accounts. When applying for bankruptcy it is important to have all assets- liquid and money assets, homes, cars, etc. listed on in the paperwork to avoid being accused of fraud.
• Conflict of Interest
Usually existing wherever a person holds some form of power, filing a bankruptcy claim can become a play of power. Know when conflict of interest exists whether it is with ex-employers, etc. and make sure you make note of this if you yourself find that you are in a position where this may occur.
• Destruction of Documents
Lastly, the destruction of documents can also be considered fraud. From destroying evidence needed to file claims to intentionally destroying knowledge of assets and previous claims, can leave one in an even bigger and worse situation.
Gather the facts and know how to recognize bankruptcy fraud. If you are aware that this type of fraud is occurring, make sure you contact the United States Trustee Program under the Department of Justice for further investigation or the FBI. While many people who face bankruptcy may be honest individuals who are dealing with a major change in their lives and status of finances, a limited few may take advantage of bankruptcy proceedings in order to hide assets and get out of paying debt. Know these signs and how to report dishonest behavior before it becomes out of control.
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