Honesty is Always the Best Policy When Filing Bankruptcy

Bankruptcy Filings...

Bankruptcy Filings... (Photo credit: MyEyeSees)

When you are faced with having to file for bankruptcy protection, it is only natural to want to protect all that you have accumulated through the years. Understanding all the bankruptcy laws can be a very complicated and long learning experience for first time filers. They tend to ask questions when learning about the bankruptcy process that makes you feel that they wish the bankruptcy laws were different, and they often beg you to agree with their interpretation of the laws so they can keep more of their assets. It is natural, but honesty is always the best policy when filing bankruptcy.

Bankruptcy fraud is a crime that can land you in prison for up to five years and/or a fine up to $250,000. Common bankruptcy fraud consists of trying to hide assets from the bankruptcy court, manipulating court documents so they are false, lying under oath to the bankruptcy court, filing a false claim against a debtor, receiving debt payments or property from a debtor outside the bankruptcy, or knowingly withholding account information under certain circumstances.

When a debtor seeking to file for bankruptcy protection gets on the internet and blogs on a bankruptcy forum website, he or she is usually looking for information about what is legal and what is not legal in filing bankruptcy. In effect, they want to know their rights concerning filing, but inevitably, they will give you the impression they are “pushing the envelope” on fraud.

The truth is that most of these filer are honest and are just learning the process. They are hoping to get someone to agree with them about the process and their rights.

For those of you who are tempted to succumb to fraud, what you must remember when facing bankruptcy, the bankruptcy system or the courts did not get you into this situation. You did.

Bankruptcy laws have been designed by Congress in order to help alleviate a bad financial situation between two parties. They are designed to help prevent the debtor from going to jail so they can have a fresh new financial start. Fighting the system that is designed to prevent you from going to jail by committing fraud simply exasperates the situation, and this in turn may end up sending you where the system wants to protect you from going, jail.

It is not a crime to owe people money or own property in the United States, but it is a crime to lie and deceive the United States bankruptcy system about what you own and owe.

As part of the fresh financial start available to all U.S. citizens, state and federal bankruptcy laws have been added to help the filer possess a certain number of assets in order to have a genuine chance at any type of new financial start. That means exemption laws exist that will allow the debtor to keep some of their assets.

One of the areas that tempt people to lean toward defrauding the bankruptcy codes involves trying to keep assets. More questions are raised on this issue than most any other issues in bankruptcy.

One of the hardest things for a bankrupt person to do is to learn to move past denial and accept the opportunity to make a fresh new start. Remember, bankruptcy is a business opportunity where you can decide to start over financially. Honesty is always the best policy when filing bankruptcy.

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