Even though a bankruptcy can sit on your record or on your
companies record for a very long time, and even though it can make it nearly
impossible for you to get loans, get credit or even do any large financial
trading, there is still the factor that remains that once you have filed for
bankruptcy, your debts are most likely going to be taken care of. This had led
to many advancements in bankruptcy fraud, and has led in turn to a crackdown on
this fraud by the government, which is going to hopefully be able to take care
of too many different bankruptcies and get more and more people back on their
feet in the correct manner.
Bankruptcy fraud can be done in several ways, and some of
them are quite hard to catch. One thing that is done is when someone files for
bankruptcy but really doesn’t need to file for it. They might hide most of
their assets by giving them to others to own or hold, and by not disclosing
them. This means that the assets that they do have are taken and sold, and
their debts are forgiven, and once the bankruptcy act is closed, these people
simply get their property back from wherever they had it, and they are in much
better shape than they were before, even with the mark on their credit. If you
have enough property and you hide it from the government, then even though your
credit says you have filed for bankruptcy, you can still find ways to pay for
things because you still have the assets.
Bankruptcy fraud is dangerous because it is hurtful to the
people who file bankruptcy when they actually have to. Those that are filing in
fraudulent manners are tying up the court system and are tying up the resources
that the other people need in order to actually get their debts taken care of.
This is detrimental to the whole process. It also isn’t fair to the creditors
because if someone files bankruptcy and hides their property, the creditors are
not going to get everything that has been owed to them and are going to find
themselves out of luck. Because of the fact that bankruptcy fraud can be
harmful to so many different people, the government has cracked down on it and
now makes sure that being caught with bankruptcy fraud is something that is
very punishable. It is also not easy to get away with in any way.
