Bankruptcy Fraud Scheme

Bankruptcy fraud occurs when someone intentionally provides false or misleading information during a bankruptcy case to avoid debt or gain an unfair advantage. This can include hiding assets, inflating debts, lying about income, or filing multiple bankruptcies. The goal is to manipulate the legal process to protect assets or discharge debts unjustly. Such fraud is a federal offense, punishable by fines, penalties, or imprisonment, because it undermines the integrity of the bankruptcy system and can harm creditors who are owed money.