Nielsen Law Group

White-Collar Crimes: How to Avoid Bankruptcy Fraud and the Legal Trouble It Brings

Uninformed debtors can face bankruptcy fraud without intending to. Here are some tips to avoid being indicted for fraud and to ensure adherence to the law.


Chandler, AZ -- (SBWIRE) -- 04/30/2014 -- Bankruptcy fraud is a white-collar crime that has serious legal consequences such as fines of up to $250,000 or up to five years in prison, or both. Thomas H. Allen, an Arizona bankruptcy attorney is defending one of his clients, John K. Hoover with wife Deborah and son John Brandon against bankruptcy fraud and has been indicted Friday, April 25th 2014. The case is still ongoing.

Though some do it on purpose, unaware debtors commit bankruptcy fraud without even realizing it. Whene considering filing for bankruptcy, it is important to be educated on how to avoid fraud to avoid legal trouble.

Seek for a Professional Help. Hiring a licensed bankruptcy attorney can help with bankruptcy paperwork. It is important to make sure that no fraud will be committed even by accident. Though bankruptcy can be filed even without an attorney, a lawyer is still a necessity if the case is complicated.

Tell All, Bare All. Disclosing all assets is imperative. Failing to list all can result to the dismissal of the bankruptcy case. In addition to fraud, perjury can also be charged if the judge concludes that assets were purposely hidden. Under oath, people should be careful in whatever they declare.

Ward Off Scam Artists. Never trust any individual or organization that promises to save from foreclosure. The trick is letting the debtors sign documents that allow con artists to file bankruptcy under the debtor’s name for a monthly fee. Once the bankruptcy case is active, the creditor’s stop calling, making the debtor’s believe that the debts are being paid off by the scam artist’s company. Goodwill is very hard to find nowadays, so be careful.

File for Bankruptcy Only in One State. It is a characteristic of bankruptcy fraud to be filed multiple times in different places. So even if one lives and works in two different places or own a real estate in more than one state, filing bankruptcy in more than one state is considered fraudulent.

Hands Off to Credit Cards. Stop making credit card purchases upon filing for bankruptcy. Creditors have the right to dispute any credit card debt one had, 90 days prior to filing bankruptcy. Having credit ard purchases with the intention of having all the debt wiped clean by filing bankruptcy is a fraudulent behavior. Keep in mind that everyone is guarded by the federal law. It should not be abused.

Bankruptcy is a heavy blow to anyone in the business world. But it sure is worse to have the court summon anyone for a bankruptcy fraud.

About Nielsen Law Group
At Nielsen Law Group, their mission is simple – they provide uniquely proactive, practical and personal service to every client. They use a wide range of legal knowledge and services to assist individuals, families and businesses in Arizona and California find resolution to their legal, tax and business issues. Their personal approach and affordable fees have allowed them to build long standing relationships with their clients built on commitment and integrity.

They have offices in Chandler, Tempe, Gilbert, Queen Creek, AZ and Redlands, CA. Their attorneys and professional staff combine their in-depth knowledge of the law with practical and efficient strategies to determine the most effective approach to each client’s unique situation.

They have extensive experience across a wide range of disciplines varying from Chapters 7 & 13 Bankruptcy, Corporate Structures/Formation, Debt Settlement, Short Sales/Foreclosure Prevention, and Taxes/IRS Issues.

They ensure that clients are thoroughly informed of their options and are committed to providing each client with legal services tailored to their individual needs and circumstances. They focus their efforts on their client’s desired result and advocate for them aggressively.