Bankruptcy

==Fraud==
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Bankruptcy [[fraud]] is a [[white-collar crime]] most typically involving concealment of assets by a debtor to avoid [[liquidation]] in [[bankruptcy proceedings]]. It may include filing of false information, multiple filings in different jurisdictions, bribery, and other acts.<ref>{{cite web |title=Bankruptcy fraud {{!}} Wex {{!}} US Law |date= |website=Legal Information Institute |publisher=Cornell University |url=https://www.law.cornell.edu/wex/bankruptcy_fraud |url-status=live |archive-url=https://web.archive.org/web/20110829073637/https://www.law.cornell.edu/wex/bankruptcy_fraud |archive-date=29 August 2011 |access-date=22 June 2022}}</ref>

While difficult to generalize across jurisdictions, common criminal acts under bankruptcy statutes typically involve concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and [[Fee fixing scandal|fee fixing]] or redistribution arrangements. Falsifications on bankruptcy forms often constitute [[perjury]]. Multiple filings are not in and of themselves criminal, but they may violate provisions of bankruptcy law. In the U.S., bankruptcy fraud statutes are particularly focused on the [[Mens rea|mental state]] of particular actions.<ref>''See'' 140 Cong. Rec. S14, 461 (daily ed. Oct. 6, 1994).</ref><ref>''See'' 18 U.S.C. sec 152. [http://trac.syr.edu/laws/18USC152.html trac.syr.edu]. [[Transactional Records Access Clearinghouse]]. {{webarchive|url=https://web.archive.org/web/20080725123135/http://www.trac.syr.edu/laws/18USC152.html |date=2008-07-25 }}.</ref> Bankruptcy fraud is a [[federal crime]] in the United States.<ref>{{cite web|title=18 U.S. Code § 157|url=https://www.gpo.gov/fdsys/pkg/USCODE-2011-title18/html/USCODE-2011-title18-partI-chap9-sec157.htm|website=GPO|publisher=U.S. Government Publishing Office|access-date=14 May 2017|url-status=live|archive-url=https://web.archive.org/web/20180507212528/https://www.gpo.gov/fdsys/pkg/USCODE-2011-title18/html/USCODE-2011-title18-partI-chap9-sec157.htm|archive-date=7 May 2018}}</ref>

Bankruptcy fraud should be distinguished from ''[[strategic bankruptcy]]'', which is not a [[crime|criminal]] act since it creates a real (not a fake) bankruptcy state. However, it may still work against the filer.

All assets must be disclosed in bankruptcy schedules whether or not the debtor believes the asset has a [[net value]]. This is because once a bankruptcy petition is filed, it is for the creditors, not the debtor, to decide whether a particular asset has value. The future ramifications of omitting assets from schedules can be quite serious for the offending debtor. In the United States, a closed bankruptcy may be reopened by motion of a creditor or the U.S. trustee if a debtor attempts to later assert ownership of such an "unscheduled asset" after being discharged of all debt in the bankruptcy. The trustee may then seize the asset and liquidate it for the benefit of the (formerly discharged) creditors. Whether or not a concealment of such an asset should also be considered for prosecution as fraud or [[perjury]] would then be at the discretion of the judge or U.S. Trustee.{{cn|date=May 2023}}
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