Bankruptcy Fraud Prevention

Everyone has heard the old saying "An ounce of prevention is worth a pound of cure." Old sayings apply to some situations and not to others but this saying certainly applies to bankruptcy and to bankruptcy fraud. Nobody sets out making decisions with the intent of filing for bankruptcy and nobody who files for bankruptcy wants to end up being accused or prosecuted for bankruptcy fraud. Once the decision has been made to file for bankruptcy, there are some things you can do to help your bankruptcy go as smoothly as possible and to lesson the chance of any activities having the appearance of bankruptcy fraud. 1. Save and organize all paperwork. One file for every financial aspect of your finances with everything in the file in chronological order with the most recent on top. For files with specific documents that you think you may need to access, you can place #'s on all of the documents and list a table of contents on the inside of the folder. 2. Be able to justify any and all credit and purchases. After you have made the decision to file for bankruptcy, you should stop using your credit cards. If an emergency situation arises where you have to use a credit card, make sure you have some sort of "extra" justification for the purchase. An example would be tires for your car. If your tires are bald and you have to pay for a set of tires on your credit card, keep all of your paperwork and ask the tire technician to write on your paperwork the tred left on your tires. Keep this paperwork in your folder for this credit card. With this information available you would never be suspected of bankruptcy fraud. Worst case, this debt (not the entire balance on the card) would not be discharchable in your bankruptcy and you would have to pay this debt, post bankruptcy. 3. This is probably stating the obvious but don't do anything during your bankruptcy process that can even remotely be looked at as bankruptcy fraud. A normal chapter 7 bankruptcy is going to relieve the petitioner of tens of (if not hundreds) thousands of dollars in debt. Why risk having your bankruptcy case thrown out over trying to squeeze out every last dollar with fraudulent activity? Being debt free with a fresh start will be a life changing event. Don't mess it up by taking a chance committing fraud. There is nothing like going into your 341 meeting having all of your paperwork neat and organized and being able to answer any question and be able to justify any purchase. This along with not engaging in any activity that can be viewed as bankruptcy fraud will make your bankruptcy go as smooth as possible.