types of bankruptcy fraud
Types of Bankruptcy Fraud
The increasing rate of bankruptcy filings has also led to an increase in the number of fraud cases, which are associated with almost all types of bankruptcy. In the following article, some common types of fraud related to bankruptcy have been discussed.
- Concealment of Assets: The cases of concealment of assets is the most common one and reportedly of all the bankruptcy fraud proceedings, 70% are of concealment of assets. This type of fraud is also found very commonly in individual bankruptcy filing such as the Chapter 7 bankruptcy. Here, in order to prevent the confiscation of assets, the bankruptcy filers transfer their assets and property to friends and relatives. There are also professional criminals who specialize in taking the temporary custody of such assets in exchange of a small fee. Such a concealment of assets, prevents the creditors and liquidator from liquidating the assets and recovering money.
- False Filing: The second type of offense is that of provision of false bankruptcy information to liquidator, regarding the debts and assets. In such a case again, it can be intentional as well as unintentional. Such false and intentional misleading disclosure of information is often seen in all types of bankruptcy for business.
- Multiple Filings: Multiple filings is an intentional offense by bankruptcy filings. In a bid to confuse courts, liquidator and in many cases also creditors, people file for bankruptcy in multiple courts and also multiple states. Such a filing is often considered to be a very serious federal offense. In many cases, false names and social security numbers have also been used.
- Trustee or liquidator Fraud: The trustees or liquidator fraud is often considered to be very serious, as in such a case, the filer conspires and bribes the liquidator, in a bid to save assets and money. In such a case the sentence is very severe, for both the filer as well as for the creditor.