Bankruptcy has become more and more prevalent in the past twenty years. With the high rise of bankruptcy, comes crime, bankruptcy fraud. Bankruptcy fraud can be done by either a business or an individual, this paper will only be about business bankruptcy fraud. What is bankruptcy? What chapters can a business file? What are the ways or types a business can commit bankruptcy fraud? What are the penalties for committing bankruptcy fraud? And what are some examples and cases of bankruptcy fraud. All of these questions will be answered, but from my research bankruptcy fraud can be a grey area, it can be hard for courts to prove it. It is the word of the business owner, unless he/she self-incriminated themselves, prosecutors have an uphill battle.
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There is generally Chapter 7, Chapter 13, and a small percentage is Chapter 11. Chapter 7 bankruptcy is manly for liquidation, like stated above a trustee gathers assets and some may be seized, sells them off, and pays your creditors. Unsecured debt is completely wiped out, secured debt is different the business can allow the creditor to repossess the property that secures the debt, like a machine, vehicle, or building. The business can also agree to continue paying for that said secured debt. For a business to be eligible to file Chapter 7, the main requirement is they cannot make enough money, which is deducted from monthly expensive, to qualify to a Chapter 13 bankruptcy repayment …show more content…
The business files using the correct business name and information, using an alias and somewhat misleading or fake information, or something else like a combination of the two thereof. Multiple filings slow down the process and the court system ability to process the bankruptcy correctly and liquidate or value all assets. This type of fraud is usually accompanied by the concealment of assets. Filing multiple cases just slows down the process this than allows the business to move assets around to conceal them from the bankruptcy once the multiple filings get figured
There is generally Chapter 7, Chapter 13, and a small percentage is Chapter 11. Chapter 7 bankruptcy is manly for liquidation, like stated above a trustee gathers assets and some may be seized, sells them off, and pays your creditors. Unsecured debt is completely wiped out, secured debt is different the business can allow the creditor to repossess the property that secures the debt, like a machine, vehicle, or building. The business can also agree to continue paying for that said secured debt. For a business to be eligible to file Chapter 7, the main requirement is they cannot make enough money, which is deducted from monthly expensive, to qualify to a Chapter 13 bankruptcy repayment …show more content…
The business files using the correct business name and information, using an alias and somewhat misleading or fake information, or something else like a combination of the two thereof. Multiple filings slow down the process and the court system ability to process the bankruptcy correctly and liquidate or value all assets. This type of fraud is usually accompanied by the concealment of assets. Filing multiple cases just slows down the process this than allows the business to move assets around to conceal them from the bankruptcy once the multiple filings get figured