What constitutes a legitimate bankruptcy

On Behalf of | Sep 21, 2020 | Bankruptcy, Chapter 7 |

When an individual in Florida files for Chapter 7 bankruptcy, they’ll need to be able to prove that their reasons for filing are legitimate. If not, they might be charged with bankruptcy fraud. A person might be charged with fraud if they file for bankruptcy despite having the means to pay off their debts. They might also be charged with fraud if they incur large amounts of credit card debt because they’re going to file for bankruptcy, or if they hide their assets from the court before filing.

What constitutes a legitimate reason for bankruptcy?

A Chapter 7 bankruptcy is considered legitimate if the individual is unable to pay their debts. They might be unable to pay their debts if they lost their source of income, recently filed for divorce or became unable to work due to disability. They might also have to file for bankruptcy if they can’t pay their debts due to large medical bills or child support payments.

To make sure the filing is legitimate, the court might appoint a trustee to oversee the bankruptcy process. If the individual does anything suspicious, the trustee might report the incident to the U.S. Trustees Office. A fraudulent bankruptcy may be investigated by the FBI, which can lead to fines and up to five years in jail.

Where to get help with filing for bankruptcy

If an individual feels that they have no choice but to file for Chapter 7 bankruptcy, hiring an attorney might make the process easier. An attorney might be able to answer their questions, figure out if bankruptcy is a viable solution, and help them proceed in the case that they decide to file for Chapter 7. An attorney might also help them figure out which debts will be erased in the event of a bankruptcy.