Avoiding accusations of Chapter 7 bankruptcy fraud

For most Connecticut residents, filing for bankruptcy is an unfamiliar process. Faced with the need to identify, list and value all accumulated assets, many people will make a number of mistakes. In some cases, those mistakes can be misconstrued as acts of fraud. That’s why it’s critical to work with a qualified Chapter 7 bankruptcy attorney throughout the process.

If a bankruptcy case presents unusual details, the trustee and court that oversees the process may determine that there have been acts of fraud. An example is found in the case of a former neurosurgeon who now stands accused of intentionally hiding assets during his personal bankruptcy. He now faces the risk of prison time in addition to a $250,000 fine. According to prosecutors, the man submitted a falsified financial statement to the court. They believe that he took steps to hide more than $300,000 as well as a valuable motorcycle.

In addition, it is alleged that the man transferred more than $500,000 to another individual in an effort to shield that money from the bankruptcy process. Approximately $12 million in claims have been filed against him, and he was ordered to pay $2.3 million into a bankruptcy estate to be distributed to creditors. Those creditors include some of his former patients and business partners.

The court has yet to determine whether this former neurosurgeon is guilty of bankruptcy fraud. While his case is extreme, there are many instances under which a Connecticut resident can make errors on his or her Chapter 7 bankruptcy paperwork that could be misconstrued as acts of fraud. Working with a bankruptcy attorney throughout the process is the best way to ensure that all information has been accurately and properly provided to the court.

Source: billingsgazette.com, “Former Billings neurosurgeon charged with bankruptcy fraud“, Clair Johnson, Sept. 29, 2017