Types Of Bankruptcy Fraud
Bankruptcy is a state of affairs that is declared by the debtor to the creditors saying that he or she has no money left with them and cannot repay the debts. They are declaring themselves as legally insolvent. There are several options within bankruptcy like the assets of the person are legally divided so that the debts can be paid off. In other cases, the legal assets are protected, and debts are paid periodically and systematically. |
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However, some people claim bankruptcy falsely. In order to do this, they conceal the assets, they launch petitions and file multiple claims. Any of these is a federal crime that is punishable. There are three types of bankruptcy frauds.
Concealment of Assets:
Concealment of assets is the most popular bankruptcy fraud of all, and nearly 70 percent of the claims are fraud under this type. People just hide their assets, and show empty bank accounts. They do not list the assets and they transfer their belongings to their relatives.
Petition Mills:
Petition mills are mostly used by people who cannot pay their rent. These people who approach typing services are charged huge amounts as fees and these people file a bankruptcy case without the knowledge of the tenant. However, in this case it is just that the eviction notice is getting postponed and the person is juts buying time.
Multiple Filings:
Multiple filings can take place when the same person files for bankruptcy in different states. Some times people use their real names and sometimes false. The filer will list the same assets and hide the same ones. He conceals the assets while paying off the debts.
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