Miami Bankruptcy Fraud Attorney
Florida federal defense attorneys fighting for defendants’ rights
For people and businesses in Miami that have more debt than they believe they can repay, the bankruptcy process offers a solution that helps the debtor avoid overwhelming debt. While the process does come at a cost to creditors, bankruptcy courts do allow creditors to receive a portion of the debtor’s assets. The bankruptcy process is dependent on the debtor’s honesty and transparency. Therefore, debtors are required to disclose all of their assets to the court-appointed official who is assigned to the case. Some debtors make misrepresentations during the process. If a misrepresentation is material, it may constitute bankruptcy fraud in Florida, necessitating the need of consulting with a Miami bankruptcy fraud lawyer like Joffe Law, P.A. immediately after you believe you’re under investigation.
There are a few different ways a the filer in a bankruptcy case may commit fraud. A defendant in Florida may be convicted of bankruptcy in federal court if he or she:
- knowingly and fraudulently makes a statement in connection with a bankruptcy case
- knowingly and fraudulently receives a bribe from a debtor in relation to a bankruptcy case
- knowingly and fraudulently conceals property in relation to a bankruptcy case
- knowingly and fraudulently withholds documents from a trustee or other court officer in a bankruptcy case
Do not say anything that might incriminate you. Speak with an attorney first.
Chapter 7 vs. Chapter 13 bankruptcy
People who file for bankruptcy have two options: Chapter 7 and Chapter 13. In both cases, the court appoints a trustee to oversee the case. Under Chapter 7, the trustee sells the filer’s non-exempt property, or property that is not protected from debt collection, and uses the proceeds to pay a portion of the filer’s debt to creditors. Chapter 13 bankruptcy does not call for the filer to sell his or her assets to pay creditors. Instead, the filer is required to pay the value of the non-exempt property over the course of three to five years.
False or incomplete documents
If a bankruptcy filer intentionally falsifies paperwork or deliberately omits required information, he or she may be accused of bankruptcy fraud. Providing false or incomplete information can mislead the bankruptcy trustee and allow a filer to qualify for bankruptcy when he or she might not otherwise be able to do so. To avoid providing inaccurate information, the filer should carefully review all documents prior to submitting them to the court. Cases in which a person in Florida may have accidentally provided misleading information can be addressed by a Miami bankruptcy fraud lawyer.
When most people think of bankruptcy fraud, they imagine the filer hiding valuable items like cars, boats, motorcycles, and jewelry to give the appearance of having fewer assets. While some people may intentionally conceal assets from their bankruptcy trustee, others may legitimately dispose of certain assets for legitimate reasons such as selling property to receive a tax advantage. Individuals who have complicated fraud cases should call a Miami federal defense attorney specializing in cases involving federal bankruptcy charges to find out what’s next.
Filing in multiple states
Some people commit bankruptcy fraud by filling in multiple states. In each filling they typically use a combination of their real name and other false information, and they tend to disclose only some of their assets. Multiple filings slow the bankrupt process and can be used by fraudsters as a means of concealing some of their assets.
Maxing out credit cards
Another form of bankruptcy fraud in Florida is intentionally maxing out credit card prior to filing bankruptcy. If a person goes on a spending spree then files bankruptcy, his or her claim may be denied. Although credit card debt can usually be discharged, individuals whose behavior shows a pattern of deliberately making substantial charges on a card prior to filing bankruptcy may face a federal fraud charge. However, there are some cases in which a person may use a line of credit to pay expenses simply due to having limited cash just prior to filing a claim for debt relief. A seasoned attorney can help an individual who is mistakenly accused of bankruptcy establish that he or she did not make excessive charges with fraudulent intent.
What happens when a trustee suspects bankruptcy fraud?
Bankruptcy trustees in Florida work closely with the creditors and aim to protect the creditor’s interests. From the time the trustee initially reviews the bankruptcy paperwork and compares it to other documents to the hearings that later take place, trustees have multiple opportunities to detect inconsistencies in a filer’s claim. If a trustee suspects fraud may be at play but does not have sufficient evidence to prove fraud, the trustee may compel additional testimony and documentation through a Rule 2004 examination. If a trustee has gathered enough evidence to establish that fraud has taken place, he or she may then file a lawsuit known as an adversary hearing against the debtor. The trustee may use an adversary hearing to:
- obtain hidden or undisclosed property
- receive assets that have been fraudulently transferred to other parties
- revoke or object to the discharge of a person who has hidden assets during the bankruptcy process
In addition to the financial penalties a court may impose as a result of finding bankruptcy fraud, the filer may face criminal charges in federal court for making material misrepresentations during bankruptcy proceedings. The various hearings and penalties that are involved with bankruptcy fraud cases can easily become confusing to the average person. A seasoned Miami bankruptcy fraud attorney can help defendants understand the penalties that may be imposed and defend the criminally accused party in court. People who believe they may have made a misrepresentation that may carry criminal consequences should contact a Miami bankruptcy fraud lawyer today to learn more about how they can fight a federal bankruptcy fraud charge.