What happens if you got caught committing bankruptcy fraud? Well, since bankruptcy fraud is considered a federal offense, the following civil consequences could rapidly escalate and, in many cases, may be coupled with criminal penalties.
Potential Penalties for Bankruptcy Fraud
Bankruptcy enables you to make a fresh start on your life since once you complete the process, your creditors won’t be able to collect debts from you due to the court discharging your debts. However, the court would deny your discharge if they find out you committed bankruptcy fraud. This means that creditors could continue collecting from you or take you to court so that you’ll pay your debts by any means possible.
When filing for bankruptcy, you must inform the court about everything you possess. However, this does not mean that you could just keep them or use them to repay your creditors. While some of your property might be exempt, if you’re found guilty of bankruptcy fraud, the court would probably deny you those property exemptions and let your creditors take their pick of your assets.
Apart from these civil penalties, you could also face criminal penalties such as steep fines. The court could set a fine of as much as $250,000 for every count or separate fraud offense. In addition, you could also go to prison for up to five years, which is the maximum sentence for bankruptcy fraud. However, if you’re found guilty of committing multiple acts of fraud, you could face five years in prison for every offense. This means that if you committed three offenses of bankruptcy fraud, you could go to prison for 15 years, warns a renowned white collar crime lawyer in Houston.
You could likewise face probation. When you’re on probation, you must follow particular instructions for the duration of your probation, like attending regular meetings with your court-appointed probation officer and avoiding further criminal activity. Although probation usually lasts one to three years, a longer sentence is possible.
Main Things to Keep in Mind
You won’t ever need to worry about the potential penalties mentioned above if you’re planning on filing for bankruptcy and you’re not intending to commit bankruptcy fraud. On the other hand, if you were found guilty of bankruptcy fraud, regardless if you committed the offense intentionally or unintentionally, talk to a lawyer as soon as possible to help you secure the best possible results for your case.