Bankruptcy Fraud

In: Business and Management

Submitted By DavidC718
Words 471
Pages 2
According to the IRS, ten percent of bankruptcy filings are fraud and less than one percent of those are convicted. Bankruptcy can be filed when a company or a land owner is unable to pay overwhelming debts. Sometimes people hide their money and assets, and file bankruptcy just so they won’t have to pay back the debts that they owe even though that person is fully capable of doing so, which is illegal. This is called bankruptcy fraud, which is federal white collar crime which can lead to a maximum of 5 years in jail, and a $250,000 fine. People that you would most commonly see commit this fraud are private citizens, small business owners, corporate CEOs, real estate agents, politicians, and loan officers. There are four very common types of bankruptcy fraud, which are the concealment of assets, filing multiple times, giving false statements, and bust outs. Bankruptcy can be a hard thing to do for someone. Almost anyone filing for bankruptcy is truthful, has good intentions and is hard working. Sometimes, no matter how hard you try, the job market, the loss of your job or the high interest rates can be too much for someone to meet. There are two types of bankruptcy that someone can have, which are straight bankruptcy, and reorganization. When dealing with straight bankruptcy, someone isn’t able to pay their debts, like car loans, credit card debts, or mortgage. This usually involves homeowners, which allows them to start with a clean slate. With reorganization, that person is still able to pay off some debts, but not as fast as creditors would like you to. This gives you a repayment plan, and can stop foreclosures and repossessions. In most cases, people on file for bankruptcy when they are in serious debt, but there are people who file for them even though they aren’t in a crisis of too much debt. There are a few common types of bankruptcy fraud that the FBI or…...

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