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Texas Bankruptcy - Bankruptcy Crimes

Questions about Bankruptcy Crime? Contact Bankruptcy Attorney R.J.Atkinson

Bankruptcy is a time honored practice which provides a way for honest debtors to obtain debt relief and a fresh financial start. Whether it be a Chapter 7, 11, 12, or 13, the bankruptcy system requires that all debtors be honest and forthright throughout the entire bankruptcy process. If a debtor voluntarily files for bankruptcy debt relief under any Chapter of the United States Bankruptcy Code, they are in essence subjecting all of their business and/or personal financial affairs, to the jurisdiction of the United States Bankruptcy Court. In turn they must comply with the Bankruptcy Rules & Code in order to receive the benefits of Bankruptcy protection.

Most honest debtors do in fact comply with requirements of the Bankruptcy Court, Code & Rules. Such compliance is almost always a matter of course and routine. Occasionally a debtor may accidentally make a mistake on their bankruptcy documents such as the schedules or statement of financial affairs. Other times they may overestimate or underestimate the value of an asset. While these things may seem like “honest” mistakes or oversights to the debtor, they could raise doubts about credibility with the Bankruptcy Trustee or the U.S Trustee’s Office. That is why it is extremely important to be as accurate as possible. A trivial oversight might be considered an abuse of the bankruptcy system or even a Bankruptcy Crime.

In many cases, simple “honest” mistakes can often be amended, or reasonably explained to the Bankruptcy Trustee. In others, non-compliance with the Bankruptcy Code could result in a dismissal or conversion of the case, or may prompt a show cause hearing in the Bankruptcy Court. It can even initiate an investigation by the U.S. Trustee’s Office which can lead to criminal charges or a revocation of a bankruptcy discharge.

Question: So what is worst thing that can happen in a bankruptcy case if you aren’t honest?

Answer: You can go to prison.

Always be truthful and forthright in a bankruptcy proceeding as lying or misleading the Bankruptcy Court, Trustee, and your creditors has serious consequences. While going to prison in relation to a bankruptcy case usually never happens, it is possible. Most debtors who make honest mistakes can often overcome them by a reasonable explanation or amendment to the satisfaction of the Bankruptcy Trustee. The bankruptcy system probably isn’t looking to prosecute a debtor who may have forgotten to list their family pet on the bankruptcy schedules as an asset. However, they are looking for instances where an individual or corporate debtor may be attempting to “abuse” the bankruptcy system by intentionally hiding assets, misstating the value of assets, misleading creditors, or illegally transferring property prior to filing for bankruptcy. These kinds of actions can result in being charged with bankruptcy fraud.

Bankruptcy fraud is nothing to take lightly, especially when there is the potential for prison time. In the United States, bankruptcy fraud and other bankruptcy related crimes are Federal Crimes since the Bankruptcy Code, and all bankruptcy proceedings, are controlled by Federal law. The Bankruptcy Code is found under Title 11 of the United States Code and the criminal part the United States Code relating to Bankruptcy Crimes is found in Title 18 of the United States Code sections 151 through 158.

Bankruptcy fraud includes filing a bankruptcy petition or any other document in a bankruptcy case such as the bankruptcy schedules, or statement of financials affairs, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud also includes making a false or fraudulent representation, false claims or promises in connection with a bankruptcy proceeding, before or after the filing of the bankruptcy case, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud is a crime punishable by a fine, or up to five years in prison, or both.

If a debtor or anyone else, knowingly and fraudulently conceals property of the estate from a receiver, custodian, trustee, marshal, or other court officer it can be a separate offense, and may also be punishable by a fine, or by up to five years in prison, or both. The same penalty may be imposed for knowingly and fraudulently concealing, destroying, mutilating, falsifying, or making a false entry in any books, documents, records, papers, or other recorded information relating to the property or financial affairs of the debtor after a bankruptcy case has been filed.

Certain offenses regarding fraud in connection with a bankruptcy case may also be prosecuted in a Texas State criminal court depending on the facts and involvement of the parties in the case. Texas criminal prosecutions arising out of a bankruptcy case can include charges of theft of either goods or services that may have been obtained by the debtor for which payment, either in whole or in part, was evaded by the fraudulent bankruptcy filing.

While filing for bankruptcy can sometimes be the most responsible way to obtain debt relief and start over, it is very important to be completely honest about your situation no matter what your situation is. Lying, attempting to conceal assets or anything short of total disclosure could result in a revocation of your bankruptcy discharge, criminal charges, or in some cases prison.

The Law Offices Of R.J.Atkinson helps people and businesses file for bankruptcy under the Bankruptcy Code. R.J.Atkinson also defends clients in adversary proceedings, contested matters, and can defend those who have been charged with Bankruptcy related criminal offenses throughout the State of Texas; including crimes related to: enterprise corruption, conspiracy, embezzlement, fraud, theft, and white collar crime. We strive to maintain a personal approach and the utmost professionalism in your case. We make ourselves available and do our best to advocate for you.

If you have been charged with a Bankruptcy Crime, contact us for a free initial consultation to assess your case.

Bankruptcy Crime — Bankruptcy Criminal Defense — Bankruptcy Fraud

Contact Bankruptcy Lawyer R.J.Atkinson to Evaluate your Case: 800-436-9056

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