Filing bankruptcy has a lot of processes and verifications to go through before one could finally be discharged from his debts. Filing one might be a very tedious process but because of the relief it brings, it could be very tempting for some and may consider this as an opportunity to finally get out of their debts.
The concealment of assets is considered a bankruptcy fraud. 70 percent of found bankruptcy fraud cases belong to this category. Basically, this happens when a debtor adumbrates his assets in order to possibly save it from the liquidation process done in chapter 7 bankruptcy. The debtor may deliberately overlook to list it as one of his assets, transfer the ownership to someone and even move it into off-shore accounts. Regardless in which of the mentioned ways he does it, it is still considered against the law.
Multiple filing occurs when the debtor files bankruptcy in more than one state. In this case, the debtor still tries to keep some of his assets by only filing properties which could be searchable in a specific state only. This way, the debtor can then keep his assets from the liquidation process. Identity fraud could also fall in this category. It is when a debtor files a bankruptcy case under a false name, thus damaging the actual person’s credit report.
A petition mill, on the other hand, is when a tenant responds to an ad which misleadingly tells him that it will save him from getting evicted from his rented place. However, what it really does is it files bankruptcy under the tenant’s name, charges excessive fees and basically leaves the tenant with a bad record in his credit report. All the while, the tenant may think that he is saved from being evicted when the truth is that the petition mill simply just postpones his eviction.
Bankruptcy is a legal process made to help debtors who are financially drained and are unable to surface from his financial distress alone. It is quite unfair that some people use illegal ways to take advantage of this service which defeats it good purpose.
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