San Francisco Bankruptcy Attorney Blog

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!