Bankruptcy Fraud

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 14, 2022

What Is Bankruptcy Fraud?

Bankruptcy fraud is a crime that involves the attempt to prevent assets from being collected by the creditors to which they are owed.

In most cases, this is done by knowing concealment, such as by neglecting to list all owned assets or by intentionally hiding assets before filing to prevent creditors from having legal claim to them. Other forms of fraud include:

  • Charging credit cards without intention to pay
  • Bribing a trustee
  • Filing false forms
  • Hiding or destroying records
  • Lying or omitting information under oath

How to Report Bankruptcy Fraud

To report bankruptcy fraud anonymously, you can contact the Department of Justice or the local US Trustee's office.

You will be asked to provide specific information in the report, including your identity.

You are allowed to omit your identity from the filing, but be aware that doing so may make it more difficult for the contacted party to follow up with you and ask questions, which may impact your chances of success.

Bankruptcy FAQs

What does bankruptcy mean?

Bankruptcy is a legal proceeding in which a debtor declares their inability to pay back their creditors.

What are the different types of bankruptcy?

There are three common types of bankruptcy known as “chapters” in the U.S. bankruptcy code, Ch. 7, Ch. 11, and Ch. 13, each with varying criteria and consequences.

What is Chapter 7 bankruptcy?

Chapter 7 is known as a liquidation bankruptcy. Most of your property will be sold to pay off your debts, then whatever debt in excess of the value of your liquidated property will be cleared.

What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy is a reorganization bankruptcy. With Chapter 13, you are able to keep your personal property and reorganize your debts to a payment schedule that enables you to pay back your creditors over time (often 3 to 5 years).

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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