Filing for bankruptcy can be a complex and confusing process that leaves room for the possibility of falling into bankruptcy fraud, and this can lead to financial and legal problems. Avoid this by learning about what bankruptcy fraud is and the red flags to look for. You can also reach out to a Tullahoma bankruptcy attorney to explore legal options if you find yourself trapped in bankruptcy fraud.
What is Bankruptcy Fraud?
Not everyone realizes how many forms bankruptcy fraud can take. Bankruptcy fraud happens when false information is provided or submitted during the process of filing for bankruptcy. One of the most common forms of bankruptcy fraud is hiding financial assets for greater financial benefit.
Other forms of bankruptcy fraud include filing false forms, providing false information, filing multiple times in multiple jurisdictions, bribing professionals, and lying about finances. This can range from something as simple as writing down incorrect information on a document to complex alterations to digital financial documents.
Larger forms of bankruptcy fraud include petition mills and multiple filing fraud. Petition mills involve people who reach out for a service that promises they can prevent eviction. What this service will actually do is file for bankruptcy in their name, leaving them in financial trouble.
Multiple filing fraud involves using fake identities and fake financial information to file for bankruptcy several times in more than one location. This is often used to hide financial assets.
How to Avoid Bankruptcy Fraud
It is important to know that fraud can be committed by mistake when a financial error is made. You can avoid bankruptcy fraud by carefully going through the bankruptcy process to avoid mistakes. Working with an experienced bankruptcy lawyer can help you maximize your chances of avoiding bankruptcy fraud. Bankruptcy trustees will look for red flags of fraud.
Common red flags of bankruptcy fraud include hidden financial assets, property issues, and bankruptcy issues. Signs of hidden financial assets include missing financial records, closed bank accounts, income from unknown sources, and unlisted assets. Red flags of property issues include recent moves to new states.
Bankruptcy issue red flags are assessed by considering excluded income, debt that goes over the limit, and financial assets that arose right before filing. When a bankruptcy trustee suspects fraud, the trustee will usually report bankruptcy fraud to the U.S. attorney.
You can also report bankruptcy fraud if you suspect you are being scammed by a bankruptcy service or trustee. Provide as much information as you can, like the name and address of the person or business you suspect is committing fraud. Be prepared to describe why you think fraud has occurred, along with any evidence of fraud.
Call Tom Bible Law for Legal Help
Dealing with bankruptcy can be confusing and stressful. All you have to do is contact us today at Tom Bible Law by dialing (423) 424-3116 for a consultation about your legal options. Our experienced team of Tennessee bankruptcy lawyers is ready to help you take the steps needed for bankruptcy. We can be found throughout the Tennessee cities of Chattanooga and Tullahoma.