By Robert J. Semrad | Published May 20 2014 |
Committing Bankruptcy Fraud: Just Don’t Do It
No one gets away with lying on a bankruptcy schedule – not even celebrities. The proof: Teresa and Joe Giudice, stars of the Real Housewives of New Jersey, recently confessed in a federal court to committing bankruptcy fraud by neglecting to list income and assets.
Sources say the couple lied about Teresa’s income from the show, their combined income from personal appearances, and income from several businesses.
It’s a real shame because bankruptcy has the power to help so many people. When filed accurately, bankruptcy is able to discharge debts, stop foreclosure and help debtors make the leap from financial ruin to financial freedom.
When you file for bankruptcy, you’ll be asked to fill out a packet of paperwork that includes all income, assets and debts. Then, you’ll sign your name under penalty of perjury – which means that, if you lie, it’s a crime.
And don’t think you won’t get caught. Bankruptcy trustees know how to do their homework, and they can spot red flags from a mile away. Even if you’ve already received a discharge, you can still get busted; the Giudices committed their fraud back in 2009 and, until recently, probably thought they had gotten away with it. Nope!
So what happens if you commit bankruptcy fraud and get caught red-handed? You can kiss that debt discharge goodbye – even if your case has already been closed.
Additionally, you won’t be eligible for future bankruptcy discharges. And if you’re really unlucky, you could go to jail. That’s right, fraudsters can face imprisonment of up to five years.
So when you’re preparing your bankruptcy case, don’t transfer property to a friend or relative to shelter it. Don’t hide income sources. Don’t fail to disclose lawsuits. Just tell the truth. Look at our bankruptcy advice.
People who commit bankruptcy fraud typically do it because they’re scared. They’re worried they’ll lose their assets or property. But it’s important to remember that bankruptcy was created by the federal government to help, not hurt, those struggling with overwhelming debts. In most cases, folks who file for bankruptcy won’t have to give up their assets. And if they are at risk for some property loss, a good bankruptcy attorney can discuss options and identify a plan that minimizes that liability.
We should also clarify that penalties are for intentional fraud, not simple oversights. Bankruptcy isn’t the scary process many debtors make it out to be. If you come to your bankruptcy case with openness and honesty – and a great bankruptcy lawyer - you have nothing to lose and everything to gain.
If you’re considering filing for bankruptcy, it’s a good idea to discuss your financial situation and goals with a knowledgeable bankruptcy lawyer before making your decision. Contact DebtStoppers today to arrange your complimentary one-on-one debt analysis with a DebtStoppers bankruptcy attorney.