Bankruptcy Fraud Chapter 7 13                                           

The Trustee examined for accuracy and completeness of the petition as well as looks for assets.   There are two types of Bankruptcy Fraud that can arise in either a Chapter 7 or Chapter 13 Bankruptcy.  The first type of bankruptcy fraud is to make charges on an account within 70 days of filing in a Chapter 7.  If a person charges over $750.00 on their charge card or other accounts within 70 days of filing, the Court presumes that you knew and planned incurring the debt just before filing a Chapter 7 although you had no means or intention to repay.  The penalty for making a debt so close to filing is that you may have to pay back the amount charged.   If you have made such a charge in a Chapter 7 case you may want to wait so that the court does not presume that the debt was incurred by fraud.  The court uses a 12 factor test to determine if it was fraudulent, which includes the purpose of the debt. 

The second type of Chapter 7 or 13 bankruptcy fraud involves any transfer or deception to the court about assets in a bankruptcy case.  "Preferential or fraudulent transfers" include repossessions, garnishments, and foreclosures as well as gifts from the debtor to family members.  Whenever a garnishment, foreclosure, or repossession happens, it is a transfer of an asset without giving anything of value.  Transfers for less than the fair market value are considered preferential or fraudulent and can be recovered.  

It is important to disclose any transfer to your creditors and all of your assets to the Bankruptcy Court and your attorney.  If you will tell your bankruptcy attorney about any transfer of  assets and all of your assets, he will be able to plan with you so that you can recover or keep property.  Some persons may be tempted to not report, under report, hide or transfer aasets to family members, however, the Bankruptcy Court can reach back up to 2 years to undo these transfers to family members or others if the Debtor was not paid full value for what the Debtor gave away.   Hiding assets is a federal crime.  

The Bankruptcy Manual fully discusses bankruptcy fraud.   Download your free copy. Tell your attorney about all of your assets and about any transfer of any property worth over $600.00.   Often much of this can be avoided if you know the Chapter 7 and Chapter 13 rules, and if you plan your bankruptcy so that you keep as much as possible.   

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