Friday, May 29, 2009
BANKRUPTCY FRAUD
Bankruptcy is a case where a person declares that he financially unable to pay of the dues. This is a legal process and all the proceedings too place along according to the federal law. In bankruptcy, it is expected that a debtor will disclose all the information to the court appointed trustee. However, it does not happen all the time. When bankruptcy is filed the debtors or the creditors deliberately provide wrong information to the court appointed trustee to be profitable. Such types of activities are called bankruptcy frauds. The most common bankruptcy is listed below:Petition mills – Now a day the most common types of bankruptcy fraud in USA is petition mill. Petition mill demands that it can protect the tenant from expulsion. In this case, the one who is advertising file bankruptcy in the name of that person who has asked for the help. The person might think that he or she is getting help but they are unnecessarily increasing the time limit and dragging money in that process. It is a very serious offense and also it hurts the credit score very badly.
Concealing assets – This comprises near about 70% of all the bankruptcy frauds. Concealing assets occur when a debtor does not disclose all the assets to the trustee. This is done when a debtor want to retain assets. In most cases, it is found that the debtor transfer his or her property lien to someone else so that the property cannot be liquidated.
Multiple bankruptcy filing – It means when a person file bankruptcy in different states. In this case the debtor uses real or fake name.
Bankruptcy frauds are serious offenses and the guilty is punished as per standard law. So under any circumstances they must be avoided.
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