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Avoiding Bankruptcy Fraud

Avoiding Bankruptcy Fraud
"""The procedure of filing for bankruptcy can be tedious. In addition to the numerous requirements and procedures involved, debtors must take additional precautions to adhere to the numerous specific rules. The bankruptcy laws are extremely specific regarding how the process is to be managed and what is required of each filer; therefore, it is of the utmost importance to be accurate and trustworthy. Anyone contemplating bankruptcy should take extra precautions to avoid certain errors that could result in a case dismissal or even fraud.

Assets

The bankruptcy court evaluates the debtor's degree of financial insolvency using an inventory of their assets. Many individuals dread losing their assets to creditors in the event of bankruptcy, and as a result, they may manage their assets improperly. In bankruptcy, it can be problematic to lie or withhold information about assets. Intentional or unintentional, failing to provide the court with a complete and accurate inventory of all assets may be viewed as suspicious or fraudulent.

In some instances, individuals may surrender their assets to friends or family members prior to filing their case in order to conceal the asset and retrieve it after the case has concluded. This could be a costly error. The laws of bankruptcy do permit debtors to sell their assets prior to filing for bankruptcy, but (1) the asset must be sold for its fair market value and (2) the proceeds must be reported to the court. In a bankruptcy proceeding, any deviations from these guidelines or rules can be extremely problematic and result in fraud charges.

Debts

On the other hand, debts play a significant role in bankruptcy proceedings. It is illegal to misrepresent debts or omit creditors from a bankruptcy petition. Although the court is not required to include all of the debts in the debt discharge, all creditors, both past and present, must be listed. Filers must immediately notify the court of any changes to their debts or list of creditors to avoid suspicions of fraud.

Income

The income of the debtor is another crucial factor in determining the case's financial insolvency. While the majority of people accurately identify their income and bank account information, many forget or omit future income information. Common examples of prospective income that must be included in the petition are investment account withdrawals, pending payments on a prior claim, and inheritance funds. These are deemed income despite the fact that the debtor has not yet received the funds. Any attempt to omit or conceal this information is considered fraudulent.""

" - https://www.affordablecebu.com/
 

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"Avoiding Bankruptcy Fraud" was written by Mary under the Finance / Wealth category. It has been read 116 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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