San Francisco Bankruptcy Attorney Blog

A San Francisco bankruptcy attorney blogs about five famous bankruptcy fraud cases.

Bankruptcy fraud is possible, but there are not many famous bankruptcy fraud cases. A few cases are well known and involve businesses that either secured bad debt or whose CEOs did not adapt to new forms of technology. Most of the time, it is just bad business practices that cause bankruptcy fraud.

1. Polaroid
Polaroid’s CEO failed to adapt to the camera and ensured that it would go into bankruptcy proceedings.

2. Enron
The memory of Enron is still high in the memory; shoddy accounting practices forced the company into bankruptcy and its CEOs still have not managed to answer all of the questions surrounding their demise.

3. WorldCom
WorldCom engaged in the same shoddy financial practices as Enron and misrepresented is financial condition. MCI is a name that registers on few people’s radar any more.

4. Thinking Machines Corporation
The tale of Thinking Machines Corporation is not one of bankruptcy fraud, but rather poor planning. The business relied on contracts from DARPA, a military project to maintain profitability. Eventually contracts were shifted to become fairer and the company was forced to sell itself to Sun.

5. Big Idea Productions
Parents may remember this as something other than a famous bankruptcy fraud case. No fraud was committed here, but it was the company that produced Veggie Tales. The animated series did well, but after it produced a computer animated feature movie, it found that the proceeds far exceeded the costs of doing business. It reduced the staff, but in the end, the company was sold. There was n criminal activity here at all, simply a lack of foresight.

Please do not hesitate to contact us at our San Francisco office by calling (415) 946-8882 or (1800) 941-6730 for your debt resolution needs. You can receive a free consultation over the phone, or request a free in person appointment at a Sagaria Law office nearest you. Please visit our website at www.sagarialaw.com and fill out a free online evaluation form to determine if you are a qualified candidate for bankruptcy. Sagaria Law's team of bankruptcy lawyers, bankruptcy client care specialists and bankruptcy staff at San Francisco can assist you with all aspects of your bankruptcy case. We at Sagaria Law can assist you regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. and we are happy to help! Our bankruptcy attorneys located throughout California and Oregon can assist you with your bankruptcy questions.

A San Francisco bankruptcy attorney talks about the bankruptcy fraud law.

Declaring bankruptcy is a legal procedure, during which, people with debt (otherwise known as a debtor) seek either to eliminate or repay their creditors by placing these financial affairs into the control of the bankruptcy court under the United States Code Title 11. This is a federal law.

There were 1.4 million bankruptcy filings in 2009, according to the US Bankruptcy court. Bankruptcy fraud law shows that to commit bankruptcy fraud, one must either hide their assets (money or possessions), file for bankruptcy multiple times, or run a petition mill scheme.

In terms of breaking bankruptcy fraud law, hiding assets is most common. Frequently, before filing for bankruptcy, money or possessions will be transferred from one person or business to another, to keep it from being liquidated when the bankruptcy is finalized.

Filing for bankruptcy multiple times happens under bankruptcy fraud law when someone files in multiple states in order to also hide assets. A petition mill scheme is a scenario where a debtor may involve a third party to avoid a financial crisis and the third party files for bankruptcy and without the debtor's knowledge.

In any scenario, bankruptcy fraud is illegal and is prosecuted 100% of the time that it is reported. In 2009, 93% of the convictions requested were granted, with an average conviction of 36 months. Convictions may include actual incarceration in a federal prison or house arrest.

At Sagaria Law, we offer an exceptional team of bankruptcy lawyers, bankruptcy client care specialists and bankruptcy staff supporting San Francisco. If you need help regarding bankruptcy in San Francisco, contact us at (415) 946-8882 or (1800) 941-6730 for a free consultation or visit us online at www.sagarialaw.com to request a free in person appointment at a Sagaria Law office location nearest you. We can answer your questions regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, bankruptcy attorneys located throughout California and Oregon to assist you with all your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation to quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco!

Bankrutpcy Fraude FAQ

What is bankruptcy fraud?Bankruptcy fraud is when a debtor files for bankruptcy with the intent of hiding assets or concealing funds which could otherwise be used to repay creditors. While uncommon, the FBI actively investigates bankruptcy fraud and does prosecute those who engage in bankruptcy fraud.

Can I transfer or convert some of my assets to protect them from creditors? That depends. The bankruptcy code allows for potential debtors to plan for bankruptcy by making contributions towards retirement accounts or contributing funds towards household expenses or mortgage payments. The bankruptcy code, however, does not allow for a debtor to transfer bank account funds to another individual or make large payments to individuals just prior to filing.

Can I sell my home prior to filing bankruptcy and keep the proceeds?Yes. However, in order to protect the left over proceeds you must reinvest the funds in a new home. This is known as the homestead exemption and California law allows you to protect up to $100,000 of proceeds so long as those proceeds are applied to another homestead within six months of the sale.

What happens if a creditor challenges the discharge of a certain debt?If a creditor objects to the listing of a certain debt and believes it was incurred under fraudulent purposes, it can file a motion with the court and have a hearing on whether the debt should be discharged. The creditor must prove that at the time the loan or money was borrowed or spent that the debtor intended to never repay the loan.

If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!

A San Francisco bankrutpcy attorney sites Common Bankruptcy Fraud Questions

oth federal bankruptcy law and state law allow for certain transactions to be avoided in bankruptcy if the transactions were carried out with an intent to defraud creditors. In addition, discharge from bankruptcy may be denied if the trustee assigned to oversee the case determines the debtor engaged in fraudulent transactions. Many debtors have bankruptcy fraud questions so it is important to understand what type of behavior raises flags with the courts.

Most bankruptcy fraud questions asked by debtors deal with what type of behavior is allowed leading up to the filing of bankruptcy. Debtors often want to know whether it is permissible to transfer some or all of their property to family members or friends in order for the property to stay out of reach from creditors. Generally transfers of property made prior to filing bankruptcy are avoidable and the property, if it is not able to be exempted, will be available to repay the creditors, if necessary. Bankruptcy fraud questions also focus on whether nonexempt property can be converted to exempt assets.

Although the federal bankruptcy code is rather liberal in the approach to what types of asset conversions are allowable, prohibiting only transfers made with an actual intent to defraud creditors, the bankruptcy code also allows trustees to use state law to avoid certain transfers. For example, in California, a trustee can avoid pre-filing transfers of nonexempt to exempt assets if the transfers violate the Uniform Fraudulent Transfers Act (UFTA).

In addition to questionable transfers, trustees also want to ensure that the debtor fully disclosed all relevant information in the schedules accompanying the bankruptcy petition. The trustee will often question the debtor if they believe a schedule was filled out improperly or if the trustee believes property was intentionally omitted. Those with bankruptcy fraud questions should consult with a bankruptcy attorney in order to appropriately prepare for bankruptcy planning and filing.

If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!

A San Francisco Bankruptcy Attorney discusses bankruptcy fraud

Bankruptcy is governed by federal law, Title 11 of the United States Code (U.S.C.). Therefore, any attempt to commit bankruptcy fraud is a federal crime. There are two major types of bankruptcy fraud: concealment of assets and multiple filings. Both types of bankruptcy fraud convictions carry sentences of a fine up to $250,000 and/or up to five years in prison.

Concealment of assets is the most common type of bankruptcy fraud, and caught most often by the courts. Concealing assets is when a debtor either neglects to list certain assets in their possession, or attempts to divest himself of all of his assets by transferring them to family members or offshore accounts. A debtor does this in fear of his assets being liquidated during the bankruptcy.

The other common type of bankruptcy fraud is multiple filings. Since the filings of both Chapter 7 and Chapter 13 bankruptcies has risen so dramatically in the past ten years, it is often times difficult for courts to cross-reference each other to check for conflicts of interest. This allows a debtor to file for bankruptcy protection in two states, thus attempting to hide assets from each state by ‘storing’ part of their wealth in each state.

The 2005 changes to the bankruptcy laws have shown a significant increase in the number of bankruptcy fraud cases. One major change in the laws was the creation of the means test which compares a debtor’s average excess monthly income to that of the state’s median. In an effort to decrease average excess monthly income, debtors are now beginning to increase their average monthly expenditures for the six months prior to filing. This also constitutes bankruptcy fraud and is punishable by a monetary fine and/or prison time.

If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!