Bankruptcy offers borrowers who are drowning under the weight of debt the chance to wipe their financial slate clean and start over. However, misusing the program or trying to get around the rules can cause your petition to be thrown out—or even expose you to bankruptcy fraud charges. Consulting with a bankruptcy lawyer before filing can help you avoid these common mistakes.

3 Common Examples of Bankruptcy Fraud

1. Hiding Assets

To qualify for Chapter 7 bankruptcy or a Chapter 13 plan with lower payments, borrowers sometimes try to conceal assets from the court. Giving valuables to friends and family members or transferring assets to another state can result in serious penalties if discovered. At best, the court will seize the assets anyway, and at worst, you might actually face criminal charges.

2. Abusing Your Credit

Once you’ve decided to file for bankruptcy, you might be tempted to put new purchases on your credit cards or take out new loans. However, the trustee will typically review your financial history for the past two years. If they believe you took on significant new debt with no intention of paying, they may declare those purchases fraudulent.

3. Incomplete Forms

Leaving assets or income off of your form may constitute fraud, even if the omission is the result of a simple mistake. Having an experienced bankruptcy lawyer prepare your documents will ensure they’re completed accurately and filed correctly.

If you’re weighed down by burdensome debt, the bankruptcy lawyers at Padgett & Robertson, Attorneys at Law will help you achieve the financial relief you desperately need. This team of legal professionals is dedicated to helping borrowers throughout southern Alabama get a second chance at their financial lives. Visit their website or call (251) 342-0264 now to speak with a bankruptcy lawyer, and follow their Facebook for financial advice and legal tips.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.