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Bankruptcy Law Blog

Saturday, November 18, 2017

Bankruptcy Fraud Is No Joke

he internet is full of advice about bankruptcy “loopholes” that allow you to hide money or other assets from Uncle Sam and your creditors. Following the advice of these internet experts, or anyone else that suggests skirting the law, is downright stupid. If you get caught, you could end up in prison. 

Doctor Faces Prison

A doctor out in Montana is learning this lesson the hard way. He is facing five years in prison and some hefty fines after being indicted on two counts of false statements under oath in relation to a bankruptcy proceeding, two counts of concealment of bankruptcy assets, and fraudulent transfer of assets.

The government alleges that the doc fraudulently transferred $539,736 to another person “in contemplation of bankruptcy against his personal estate,” and hid $309,686 and a 2001 Harley Davidson motorcycle valued at $15,495 from the bankruptcy trustee. Lying about these alleged deceptions could also count as a crime. 

It’s Just Not Worth 

As the guys on Office Space learned, there’s really no such thing as white-collar-resort-prison, even for financial crimes. Getting caught committing bankruptcy fraud will land you in regular prison will all the other run-of-the-mill felons. You will lose your right to own guns, your right to vote, and you will probably have a hard time making a living once you are out of prison. These are such dire consequences; bankruptcy fraud is clearly not work the risk.

Plus, filing for bankruptcy is probably not as bad as you imagine. Thanks to movies and tv, many people have a false perception that filing for bankruptcy means giving up all of your worldly possessions and basically becoming a hobo. Nothing could be further from the truth. Most people are able to hold on to a lot more of their stuff than they think they will be able to. For example, the law lets you keep your home, a vehicle, and most household items.

If you have questions about what assets you will be able to keep if you file for bankruptcy, don’t take advice from kooks on the internet, or your crazy Uncle Eddie, and risk winding up in prison. Schedule an appointment with an experienced bankruptcy attorney and find out what your options really are. 


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”