Fraud is an act of wrongful deception with the goal of some form of personal gain. For many people, fraud sounds like a very intentional action. However, it's a lot easier to engage in fraudulent activity than realized; particularly when it comes to bankruptcy.

Bankruptcy fraud is a serious crime that can result in fines and jail time, upon conviction. Learn some of the pitfalls that could leave you accused of bankruptcy fraud.

A petitioner for bankruptcy must be willing to be an open book. A part of being transparent is listing all your assets. Listing your assets is essential for determining if you qualify for bankruptcy and to determine how much of your debt you will be able to pay off.

It's important to note that every person makes mistakes, and the person responsible for reviewing your filing information will likely be understanding of this fact. However, it's much more challenging to excuse a mistake when it's a large one.

For example, failing to list a savings account with $150 in it is much different from forgetting to record a bank account with a $15,000 balance.

Bankruptcy is designed only to help those individuals who have hit a brick wall. This proceeding is for people who have a great deal of debt and have no clear path for repayment. You might fit perfectly into this box, but if you significantly increase your debt load just before you file for bankruptcy, you run the risk of being accused of fraud.

An example of this behavior would be maxing out a credit card that you intended to discharge in bankruptcy. Amassing a substantial amount of new debt before you file looks like an intentional effort to make purchases and acquire more belongings, without having to pay for them.

Bankruptcy is rarely an impromptu decision. For many people, their debt has been amassing for some time, and they have experienced continued difficulties paying down these expenses. If you're in this boat, now is not the time to make any transfers for property or other assets that you own. For example, don't transfer the deed to your family home to your adult child.

The court may find your timing for making this change as suspicious behavior, even if this is something you had planned to do. Once the idea of filing for bankruptcy comes onto the horizon, you don't want to make any changes to your assets.

The goal of bankruptcy is twofold, in that the goal is to help the petitioner resolve their financial issues but also to ensure that each creditor has the opportunity to have their debt resolved. To aid in this process, bankruptcy petitioners are typically required to sell or liquidate assets that may be able to go towards minimizing the amount of money owed.

When an individual undervalues the value of an asset, this could be viewed as fraud. To avoid this type of mishap, have any high-value items appraised to ensure the value you're reporting to the courts is accurate.

For example, if you have a diamond ring, don't just assume a value because if it's discovered that the value of the jewelry is significantly more than you claimed, you could face consequences.

Avoiding these and many other mistakes has a lot to do with your preparedness and experience. Without the right level of skill in these areas, you leave yourself vulnerable. However, a skilled attorney can help you avoid a costly mistake, and at the office of Joseph E. Walden, Attorney at Law, we're happy to stand in as the attorney you need.

We are here to assist you with your  bankruptcy  needs, from start to finish.