Bankruptcy Fraud: Tips for Filing
Here are 13 tips to keep in mind before filing for bankruptcy:
1. All creditors must be listed, even the ones you intend to pay after the case is filed.
2. Many assets are protected from being seized by the bankruptcy court, but only if they are not listed. It is a crime not to list all property.
3. Part, or all, of any tax refund due for the tax year a bankruptcy case is filed may be required to be turned over to a bankruptcy trustee. Any refunds that are due for previous years may be required to be turned over.
4. You must list all business information if you are self-employed. If you are in business you must list all personal and business debts, assets and income.
5. All income must be reported, including Social Security benefits, family support, alimony, unemployment, and pensions.
6. Intentionally incurring debts with the intent not to pay may be a crime.
7. You should maintain payments on all secured property that you wish to keep that could be repossessed before the case is filed. This includes house payments, car payments, furniture payments, equipment, and other items used as collateral.
8. The court may disallow a bankruptcy if you misrepresent any facts or otherwise lie on the papers filed in court for the bankruptcy.
9. Bankruptcy stops all bill collectors. Creditors, including tax collectors, are barred from attempting to collect any debt from you the instant the petition is filed. This protection is permanent for all discharged debts. Bankruptcy does not stop any criminal proceeding or government regulatory proceeding.
10. Bankruptcy does not clear up a credit report. It may be reported on credit reports for 10 years.
11. You cannot dismiss a Chapter 7 case without court approval. You can voluntarily dismiss a Chapter 13 case anytime.
12. A secured creditor may add the attorney fees they incurred to the balance owed on the property. This may happen even if you are not behind on payments at the time the bankruptcy is filed. Most mortgages and other loan documents provide that reasonable attorney fees are allowed and will be added to the balance due on a loan.
13. Bankruptcy crimes carry a punishment by, among other things, imprisonment for up to five years. It is a bankruptcy crime to: conceal property from the court or bankruptcy trustee; knowingly and fraudulently make a false oath or account; knowingly transfer or conceal property to defraud creditors; conceal, destroy, mutilate, or falsify records or documents; and file a bankruptcy petition to deceive or defraud. |
