Why Bankruptcy Fraud Charges Are Widespread

 Posted on February 26, 2025 in Fraud

It is very easy to carry out bankruptcy fraud without truly intending to. Making an inaccurate statement on your bankruptcy filing can be enough to get you charged with fraud, even if you did not realize the information you provided was inaccurate. Bankruptcy law also creates an unusual set of circumstances where you could be charged with bankruptcy fraud for something you did before you even decided to file for bankruptcy. People can be accused of bankruptcy fraud just for making a luxury purpose a month before filing. However, being accused of fraud does not mean that you will be convicted of a crime. There is a lot a Dallas, TX white collar crimes lawyer can do to help you. A simple mistake can easily appear to have fraudulent intent in bankruptcy. An attorney can often help to show that you were acting in good faith and have not committed a crime.

Providing Inaccurate Information Does Not Mean You Lied 

When you are filing for bankruptcy, you will need to make a lot of detailed financial disclosures. You will be asked to disclose what assets you own, whether you have made any luxury purchases recently, and what income you have. However, not everyone keeps close track of their finances. It is easy to forget about a short-term job you had or an asset you have not used or thought about in a long time, especially if you are working multiple jobs or are busy with family responsibilities. Mistakes are even more likely to happen if you and your spouse are filing together, as there is an added risk of miscommunication when you are preparing your documents. This can make it appear that you were trying to conceal an asset, which is regarded as bankruptcy fraud when it is done intentionally.

Additionally, it is easy to assume that the statements you provide will not be questioned. Bankruptcy courts deal with fraud often and do tend to find out if a debtor’s disclosures are inaccurate.

Bankruptcies Are Not Always Planned 

Some people know well in advance that they are probably going to have to file bankruptcy. Others are reasonably financially stable one month and bankrupt the next after losing a source of income. You may have bought something that was not strictly necessary under the belief that you could afford it, only to get laid off the next day. Most people do not have the savings to keep up with their usual expenditures, let alone monthly payments towards their existing debts, for very long after a job loss.

The problem here is that if you purchased luxury goods or services on credit shortly before filing bankruptcy, it can appear as though you were deliberately borrowing money you had no intention of paying back, which would be fraud. This can lead to people who were acting in good faith being accused of attempting fraud.

Contact a Dallas, TX Defense Lawyer 

Spencer & Associates will fight for you when you are facing a bankruptcy fraud accusation on top of an ongoing bankruptcy. Our experienced Dallas County, TX bankruptcy fraud attorneys understand what is at stake in this challenging situation and will do all we can to help you. Contact us at 214-385-8500 for a complimentary consultation.