Although most Colorado residents who file for bankruptcy are fair and honest, there are others who take advantage of the system. This is considered bankruptcy fraud, which is a huge problem and is considered to be a white-collar crime.
What is bankruptcy fraud?
Bankruptcy fraud is a federal crime that occurs when a person files for bankruptcy with the ill intentions of personal gain.
How is bankruptcy fraud carried out?
There are different ways in which bankruptcy fraud can be committed. One way is through filing in multiple states. Even if a person has a separate home in a different state and they file bankruptcy in Colorado and in that other state, it’s considered fraud. People do this to retain their assets while eliminating even more debt.
Hiding property is another common form of bankruptcy fraud. This can occur when a person fills out their bankruptcy forms and deliberately fails to include certain property or includes false financial information. Hiding property is probably the most common way for people to commit bankruptcy fraud. When they fail to mention valuable assets, it unfairly saves them a lot of money and lets them hold onto that property.
Lying about the value of property is another way people could commit bankruptcy fraud. It gives the individual an advantage as they are able to retain that property and eliminate their debt.
It’s a federal offense to try to hide property and assets by handing them off to family members or friends. People who commit bankruptcy fraud often look to those in their trusted circle to help protect those things so that they don’t have to include them in their bankruptcy filing.
Sometimes, a creditor commits bankruptcy fraud. If a creditor claims that a person still owes them debt after they already paid that debt, it’s considered a federal crime.
Bankruptcy fraud is serious. If you have been charged, protect your rights and freedom and get immediate help.