Honesty and Integrity is the Best Policy to Avoid Bankruptcy Fraud
It is not uncommon for people, who are drowning in debt and endeavoring to make ends meet, to look toward bankruptcy for a financial fresh start. Dishonest debtors can taint the process by committing bankruptcy fraud. Debtors, who intentionally hide assets or property from the bankruptcy trustee or who fail to provide accurate information to the bankruptcy court, could risk having their case dismissed and could face serving time in jail.
Lenny Dykstra, former All-Star outfielder with the New York Mets and Philadelphia Phillies, served several months in a California prison for bankruptcy fraud. Dykstra filed a bankruptcy petition a few years ago claiming that he owed $31 million in debts, but had only $50,000 in assets. However, the bankruptcy trustee assigned to Dykstra’s case found that Dykstra had hidden some valuable baseball paraphernalia that he owned — gloves from his playing days— that should have been part of his bankruptcy estate. In the criminal proceeding, the trustee testified that Dykstra sold, hid or destroyed nearly $200,000 worth of his possessions without permission from the trustee. After serving out his sentence, Dkystra must spend three years on probation, complete 500 hours of community service, and pay restitution of $200,000.
What is bankruptcy fraud?
Bankruptcy fraud takes four general forms:
- Concealing assets to avoid having to liquidate
- Intentionally filing incomplete or false forms
- Filing multiple petitions using either false information or factual information in different states
- Bribing a bankruptcy trustee
Most bankruptcy fraud involves concealing assets. If a debtor doesn’t reveal particular assets, then creditors can’t liquidate them to pay off the debt owed. Concealment can also involve transferring hidden assets to friends or associates so that the trustee cannot locate them. A debtor will face serious consequences once the fraud is revealed.
If you need bankruptcy protection and want to keep your assets, a skilled Pennsylvania bankruptcy lawyer can help you find honest solutions. At Harold Shepley and Associates we understand that keeping your property is a primary concern during bankruptcy. Contact us today for a free consultation. All you have to lose is your debt.
August 22, 2013 Posted in Bankruptcy Tagged bankruptcy fraud, filing for bankruptcy, Pennsylvania bankruptcy attorney Leave a comment
