Sandiego Bankruptcy Attorneys

Bankruptcy fraud, although it can vary greatly from country to country, may be charged in most cases due to false statements and declarations, fraudulent claims, conflicts of interest, destruction or concealment of relevant documents, concealment of assets or due to redistribution arrangements and fee fixing. Bankruptcy fraud is in many countries considered a white collar crime. Multiple bankruptcy filings may not be a crime by themselves but they may in turn violate the provisions laid down by the bankruptcy law. Often, when bankruptcy forms are falsified, it constitutes perjury. Bankruptcy fraud statutes, in the United States, are primarily observant of the mental state of the performed actions. It is considered to be a Federal crime in the US. It may be noted here that bankruptcy fraud and strategic bankruptcy are quite different from each other. The latter, although not considered a criminal offence, may server to work against the debtor.

A debtor must disclose all his assets during bankruptcy schedules, even if he or she believes it holds zero net value. This has to be done because once the debtor has filed for bankruptcy; it is up to the creditors to evaluate the asset in question. If a debtor attempts to assert ownership on an earlier unscheduled asset, after being completely rid of all debts, the case may be reopened by the court of law. The asset in question may be then seized and liquidated for the creditor’s profit. The concealment of such an object may or may not be considered for prosecution, depending upon the judge’s discretion.

Nowadays, the primary aim of modern bankruptcy legislation and business debt restructuring programmes is usually to help the debtors facing financial distress by rehabilitating them, thus allowing them to continue their businesses. Instead of trying to eliminate the bankrupt person or organization, the laws try to get to the root of the problem by remodelling the debtor’s organizational and financial structures.

In the case of private house-holds, simply dismissing their debts after a given amount of time is considered to be insufficient for the long run. It is vital, therefore, to examine the problems underlying the situation in order to minimize the chance of such a situation occurring again in the future. When a person is undergoing rehabilitation due to his or her financial crunch, it is of paramount importance to provide social help, financial education and debt advice to him or her to help find new sources of income and also to optimize household expenditure.

Debt discharge is the situation when the debtor’s debt is cancelled or forgiven by the law. The law for discharge varies from country to country. In the United States, for example, debt discharge is conditioned to a certain level (partial payment obligation). The United Kingdom follows a similar system as well. Other countries, Spain, for example, grants a debt settlement scheme which results in the debt being reduced, at most to half its value, along with a payment period of 5 years.

Bankruptcy, also sometimes known as insolvency, is the state of a person or an organization which is unable to repay its debts back to the creditors. In some cases, the creditor may file a petition for the organization’s bankruptcy, thus making it a case of involuntary bankruptcy. This is done by the creditors in a bid to recover at least some part of their lost money, if not the entire sum. However, most bankruptcy cases are that of voluntary bankruptcy, i.e. the person or organization in debt files for bankruptcy themselves. It may be noted that creditors cannot file for involuntary bankruptcy against any individual debtor who is not running a business.

The word bankrupt is formed by coining the two ancient Latin words ‘bancus’, which refers to a table or a bench, and ruptus, which means ‘to break’. A bank primarily refers to a table or a bench (bancus), as they were the first public banks to be used. Bankers would usually make all their transactions and collect their money in such benches in many public places including fairs, markets etc. When a banker was unable to continue trading due to a lack of cash, he would break his table, thus letting the public know he was ‘bankrupt’.

When a debtor files for bankruptcy, his entire wealth and assets are measured and thereby evaluated. The value of all his assets is used in repaying the creditor a part of the outstanding debts. When a bankruptcy procedure is executed completely, the debts incurred by the debtor prior to filing for bankruptcy are waived for good.