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Bankruptcy and Fraud

concealing assets

Bankruptcy is not usually something that most people want to become involved with. However, there are unfortunately some people who try to take advantage of the system and the purpose of bankruptcy. Bankruptcy is ideally designed to help people who are too deep in debt to pay their bills. The idea behind bankruptcy is that a person or company’s assets and properties can be divided so as to repay the creditors in an organized fashion. Once all the properties and assets have been divided, the person or company can begin to work toward rebuilding credit. Some people try to use this system to their advantage – this is where fraud comes in.

More Information about Fraud

Fraud itself is a federal crime. The act of fraud is prosecuted under Title 18 of the United States Code. People or companies who are involved in committing fraud can be prosecuted by a United States Attorney to the fullest power of the law. An act of fraud can be prosecuted after the act is referred to the attorney by the United States Trustee, the Interim Trustee, or the bank judge. When a person files with the intent of taking advantage of the system, the person can be put to trial.

Although committing an act of fraud is not the same as strategically filing for bankruptcy –an act that is still frowned upon but may be recommended to some people considering their situation- fraud may be similar in concept. When a person files with the intent to commit fraud, he may conceal his assets in order to prevent them from being divided or may commit another act of fraudulent conveyance. New measures of protection against fraud include the Bankruptcy Abuse and Consumer Protection Act, a measure passed in 2005 that aims to make it more difficult for people or companies to file for certain chapters of bankruptcy. This Act works to ensure that people are not as easily able to take advantage of the bankruptcy system. Those who do need to file for bankruptcy may find the process more difficult, but ultimately it will work to protect the innocent consumer from the costs of fraud.
  • History of Bankruptcy

    The word Bankruptcy comes from the Latin word “bancus,” which means a bench or a table, and “ruptus,” which means broken..
  • Bankruptcy and Fraud

    When a person files with the intent to commit fraud, he may conceal his assets in order to prevent them from being divided or may commit another act of fraudulent conveyance.
  • Individual Bankruptcy

    Bankruptcy relieves debts that people have been unable to pay themselves. .
  • Causes of Bankruptcy

    Most people who file for bankruptcy are usually in debt over their heads...