Bankruptcy Fraud – More than ever it is imperative to choose a bankruptcy attorney with experience in the new bankruptcy laws and procedures. In 2005 Congress enacted legislation with drastic changes to the bankruptcy laws and procedures. The 2005 Bankruptcy Act was enacted to curtail bankruptcy fraud. Too many people were filing bankruptcy when they could clearly afford to pay their debts.
Congress also felt there should be stricter standards in examining the paperwork submitted by the bankrupt debtors. In addition, they wanted additional proof and verification of a debtor’s assets and financial condition by requiring paystubs, tax returns and other paperwork required to be submitted by debtors. Under Section 342(b) and 527 (a) of the Bankruptcy Code, Bankruptcy Crimes and Availability of Bankruptcy Papers to Law Enforcement Officials. A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury, either orally or in writing, in connection with a bankruptcy case is subject to a fine, imprisonment, or both. All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the attorney General acting through the Office of the United States Trustee, the Office of the United States Attorney, and other components and employees of the Department of Justice.
Under the new law, a debtor's attorney is required to investigate and verify their clients are honestly disclosing the truth about their financial condition and their assets. The attorney must investigate their clients and obtain and review their clients’ financial documentation to verify their income, assets and financial status. If the information is not honest and correct, along with the debtor, the debtor's bankruptcy lawyer is also subject to sanctions. WARNING: Section 521(a)(1) of the Bankruptcy Code requires that you promptly file detailed information regarding your creditors, assets, liabilities, income, expenses and general financial condition. Your bankruptcy case may be dismissed if this information is not filed with the court within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court.
Since 2005, due to the increased responsibilities and work a bankruptcy attorney must complete, bankruptcies have become more expensive. The bankruptcy attorney now must spend more time reviewing the debtor's information, investigating, and then deciding on a legal solution to best fit the needs of their client.
A debtor must be honest and forthright when they discuss their financial situation with the attorney. Remember there is Attorney Client Privilege. We all know that from watching television. However, there are many who are simply deceptive and dishonest people. No matter what they will lie about everything, falsely believing no one will catch them. Our advice, remember what happened to Martha Stewart when she went before an Officer at the Department of Justice. Martha went to jail for almost a year for alleged lies to an officer at the Department of Justice. You are going to be under oath answering questions by an officer at the Department of Justice. If you lie, you will go to jail. We will not be able to help you then.
We have been helping clients for almost 20 years. We can tell you over the years many clients come into our office and begin to tell us a trail of lies. It is easy to see the same lies over and over. People lie about their marital status, they lie about whether or not they are employed, they lie about whether or not they own a vehicle, they lie about their assets, etc. When confronted with their lies and dishonest remarks, the usual result is the person becomes combative and threatens to call the ARDC, Attorney General or President Obama, etc to scare us into filing their case under their dishonesty. We do not represent those types of people who are dishonest con-artists. If a client lies to us after a warning, we will drop them like a hot potato. Our success has afforded us the opportunity to be very selective with the clients we choose to represent. Dishonest clients are not entitled to receive our services. You do not want to go to jail for up to five years for bankruptcy fraud for lying about something that most likely would not even affect your eligibility to file bankruptcy in the first place. So don’t lie.