The federal bankruptcy process is streamlined to provide timely financial relief to deserving individuals. A
Chapter 7 'erase-your-debts-and-start-fresh' bankruptcy generally takes a mere 4-5 months, start to finish. The debtor discharges burdensome unsecured debt, and may get additional relief by restructuring secured debts. A
Chapter 13 bankruptcy reorganizes your debts so you can make manageable payments to your creditors. This 'consolidation' bankruptcy typically lasts from 3 to 5 years.
A trustee is assigned to each bankruptcy case. The trustee has hundreds of cases each month to review, and a bankruptcy judge will preside over thousands of bankruptcy court cases. Consequently, the bankruptcy process relies heavily upon the honesty and candor of the debtor who is required to accurately account for all income, expenses, assets and debts. The vast majority of debtors are honest, but the Department of Justice (DOJ) estimates that one out of ten cases have some element of fraud attached to it. When fraud is suspected, bankruptcy trustees aggressively investigate and use the resources of the DOJ, the FBI, and the IRS.
Bankruptcy fraud carries a maximum penalty of 5 years in prison and a $250,000 fine. Those convicted on federal bankruptcy fraud charges spend an average of 31 months in prison. Still, some people never learn. . .
The Portland Division of the FBI recently issued a press release concerning a bankruptcy debtor"s guilty plea to fraud charges. Viengkham Virasak, 44, of Corvallis, Oregon, incurred debt in his family members" names and then filed bankruptcy cases in their names. Virasak actually discharged $87,500 in debt, and then filed other bankruptcy cases when he was discovered.
In May, former baseball player Lenny Dykstra was indicted on bankruptcy fraud charges. The indictment alleges that Dykstra took and sold items from his $18 million mansion after filing for bankruptcy protection. Once an individual files Chapter 7 bankruptcy the assets of the individual become part of a 'bankruptcy estate' which is the responsibility of the trustee. The trustee claims that 'Dykstra stole and destroyed more than $400,000 worth of property in the estate.'
Bankruptcy fraud is serious business. Dishonest acts during bankruptcy may cause the court to deny your discharge and you may face criminal charges. Whatever your financial situation, it is best to discuss your options with an experienced bankruptcy attorney. The bankruptcy laws are written to help the honest, but unfortunate debtor. At Glanzer & Associates, your attorney will achieve the best legal results possible whatever your circumstances may be.
Contact the experienced Chicago bankruptcy attorneys at Glanzer & Associates, P.C. at 1-312-644-2227 to discuss your specific situation, and to schedule your free, in-person consultation.