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Consequences of Attempts to Defraud -
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If the debtor made a fraudulent transfer of an asset, and the trustee discovers it, the trustee can sue to set aside the transfer and recover it for the benefit of the bankruptcy estate, under Section 548 of the Bankruptcy Code. Thus, the trustee can get back the car, painting, watch, or coin collection from the friend or relative to whom it was fraudulently transferred, or its value in money. If the debtor omitted an asset from his schedules of assets, and the trustee finds out about it, the court can compel turnover of the asset to the trustee. The debtor can be further penalized by the Court disallowing any exemption in the asset which the debtor may otherwise have been entitled to, under Section 522 of the Bankruptcy Code.
Denial of Discharge Under Section 727
If a debtor transferred the asset within one year
prior to the bankruptcy filing, with the intent to hinder, delay and
defraud his creditors, it is a ground for denial of his discharge
under Section
727 of the Bankruptcy Code. If the debtor omits an asset or fails
to report the pre-bankruptcy transfer of an asset, this can lead to
denial of his discharge under Section 727 of the Bankruptcy Code for
making a "false oath or account". This means that he will
have filed
his bankruptcy for naught. He will still be liable to his creditors,
and will be out the money he paid for the bankruptcy court filing
fee and attorney's fees.
Written by Henry Rendler | ![]() | ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() - Consequences ![]() - Criminal Fraud - Prosecution - Reporting Fraud ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() What You Should Know ![]() |