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The Dangers of Being Dishonest in Your Bankruptcy Case

Posted on in Bankruptcy

waukegan bankruptcy lawyerWhen you file for protection under the United States Bankruptcy Code, you may be able to stop creditors and bill collectors from harassing you for payments that you cannot afford. Depending on the type of bankruptcy you are filing, you may also be able to get a substantial portion of your debt discharged.

Whether you file under Chapter 7, Chapter 11, or Chapter 13, bankruptcy proceedings can be complicated and time-consuming, and it may be tempting to take shortcuts. Doing so, however, is incredibly dangerous and could lead to even more serious problems than not being able to pay your bills. Bankruptcy fraud is not just a serious matter; it is also a federal crime punishable by imprisonment in a federal penitentiary.

Virginia Man Faces Prison Time for Bankruptcy Fraud

According to the United States Department of Justice (DOJ), a 67-year-old man from Abingdon, Virginia, will be sentenced in May after pleading guilty to one count of bankruptcy fraud in federal court. Last week, the man acknowledged that he misrepresented information in a Chapter 11 bankruptcy proceeding that he initiated in September of 2015.

According to court documents and the DOJ, the man originally testified in his bankruptcy hearings that he had deposited all of his earnings and income into a special “debtor-in-possession” account—a requirement of the proceedings for bankruptcy protection. Later, the man would admit that he had knowingly provided false testimony and that he had, in fact, made large deposits to a business account at a local credit union and used those funds for his lifestyle expenses, including several significant withdrawals at a North Carolina casino resort.

The man pleaded guilty, which means the case did not go to trial. His sentencing hearing is scheduled for May, and he faces up to five years in federal prison.

Always Be Honest and Forthcoming

If you have filed bankruptcy, relief is likely on its way. However, it is critical for you to be transparent and honest about your financial situation. Failure to meet the requirement of the proceedings, as well as any intent to deceive the court, could constitute bankruptcy fraud—a serious federal crime. The risks are simply too great to take your chances of being caught in a lie.

Work With a Lake County Bankruptcy Attorney

Before you file any type of petition for bankruptcy, it is important to sit down with a qualified Libertyville bankruptcy lawyer. Your attorney will make sure you understand the entire process, as well as your rights and responsibilities along the way—which can save you a great deal of time and stress as you begin the process. Call 847-549-0000 for a free consultation at Newland & Newland LLP today.



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