Categories: Bankruptcy

Bankruptcy Fraud – Is It the Dumbest Idea Ever?

From glitter and sequins to an orange jumpsuit is a big change for former “Dance Moms” star Abby Miller. The reality star pled guilty to a laundry list of fraud charges and new charges of violating currency reporting lawsafter a tour of Australia. Though she originally pled not guilty in November of last year, the plea deal is an about face from her request for a jury trial that could have meant $250,000 in fines per each of the 20 counts. The Dance Mom was accused of trying to hide assets totaling over $750,000 during her Chapter 11 filing in 2010.

Bankruptcy fraud is a federal crime that typically comes in four flavors:

  • Concealment of assets. Hiding assets that are part of the filing in order to keep them. This constitutes 70 percent of all fraud cases.
  • False or incomplete filing. Either lying outright or lying by omission.
  • Multiple filings. Multiple filings are made in multiple states.
  • Bribery of the trustee. Offering the US Trustee in charge of the case money or other inducements to overlook fraud.

These crimes often come packaged with other fraud crimes such as mortgage fraud, wire fraud, title fraud, and tax fraud. A lot of people consider white collar crimes “victimless” crimes in that nobody is mugged or shot and that no violence is done in the commission of the crime. But, tell that to the people who are paying huge insurance rate hikes because of Assignment of Benefit fraud. The ones who pay in a bankruptcy fraud case are the creditors and to make up the shortfall they turn to their customers and clients to make up the difference.

In addition to fines, Abby Miller is looking at jail time. Her attorneys have asked for no more than six months but she could serve as long as three years plea deal or no plea deal. It is not worth what it does to you, not worth what it does to your family, and not worth what it does to you future. Bankruptcy is a serious legal procedure not to be undertaken lightly or because you want to “beat” the tax authorities or your creditors. Once you file, you are bound to be truthful and honest about your assets as well as your debts.

The consequences can vary from probation and home confinement to a stretch in the federal penitentiary. For the most part, my practice sees people who are overwhelmed by debts afraid of what will happen to their homes, their businesses, and their families. Sometimes attorneys may not adequately explain what assets need to be declared, other times people use a bankruptcy preparer instead of an attorney, and in some cases they enter into the process of bankruptcy intending to lie, cheat, and steal. If you are legitimately seeking to file for bankruptcy as a person or corporation, I can help you, even offer a free consultation. If you’re looking to have your cake and eat it too, I’d advise you to rethink your course of action.

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Published by
Chad Van Horn

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