Jun 4, 2025

Bankruptcy Fraud Law

Understanding Bankruptcy Fraud

Bankruptcy fraud is a serious federal crime that undermines the integrity of the bankruptcy system. It involves acts intended to defraud creditors, conceal assets, or otherwise abuse the bankruptcy process.

Types of Bankruptcy Fraud

Common types of bankruptcy fraud include:

• Concealing assets to avoid having to forfeit them
• Intentionally filing false or incomplete forms
• Filing multiple times using false information or in different jurisdictions
• Bribing a court-appointed trustee

Legal Consequences

What is the sentencing guideline for bankruptcy fraud?

Bankruptcy fraud is prosecuted as a federal offense. Conviction can result in up to five years in prison, fines up to $250,000, or both. The actual sentence depends on the severity of the offense and other factors considered by the court.

Relevant Laws and Statutes

What is the US code for bankruptcy fraud?

Bankruptcy fraud is primarily prosecuted under Title 18, Section 157 of the United States Code. This statute outlines the specific actions that constitute bankruptcy fraud and the associated penalties.

How Bankruptcy Fraud is Investigated

Cases of suspected bankruptcy fraud are typically investigated by the Federal Bureau of Investigation (FBI) and the Office of the United States Trustee. These agencies review bankruptcy filings, interview witnesses, and gather evidence to determine if fraud has occurred.

Preventing Bankruptcy Fraud

To avoid accusations of bankruptcy fraud, individuals should fully disclose all assets, income, and debts when filing for bankruptcy. Consulting with a qualified bankruptcy attorney can also help ensure compliance with all legal requirements.

Bankruptcy Fraud Law