What is Bankruptcy Fraud?

What is Bankruptcy Fraud?

Many consumers who file for bankruptcy protection have questions about bankruptcy fraud.
For example, some consumers wonder how the United States Bankruptcy Code defines bankruptcy fraud. On the other hand, other consumers wonder if there are other federal statutes that can help people develop a definition of bankruptcy fraud.

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It turns out that the United States Legal Code provides information which can help people develop a general definition of bankruptcy fraud.
These scholars believe that the United States Legal Code could be used to define bankruptcy fraud to be actions that result in “knowingly and fraudulently concealing from a custodian or trustee any property or financial information belonging to the estate of a debtor.”

This definition is very close to the definition of bankruptcy fraud that is included in information packets about the bankruptcy process that are offered by many bankruptcy courts around the country. As a result, it is considered by most bankruptcy law experts to be a good general definition of bankruptcy fraud.

However, other legal scholars believe the definition of bankruptcy fraud could be extended to include other actions that might impede the bankruptcy process.

These legal scholars believe that a more precise definition of bankruptcy fraud is a definition that closely resembles the definition provided by West’s American Law Encyclopedia. These scholars believe that bankruptcy fraud is considered to be “any and all actions of a debtor which result in gross misinformation or gross misconduct during a formal bankruptcy proceeding.”

This definition of bankruptcy fraud is widely accepted by many legal scholars because it accounts for every possible way in which a debtor could possibly commit fraud during the bankruptcy process.
To summarize, most legal scholars contend that there are several valid definitions one could use to define bankruptcy fraud.


These definitions vary because they contain different interpretations of the types of actions that could be used to commit bankruptcy fraud.
As a result, legal scholars have started a campaign to standardize the definition of bankruptcy fraud. It hoped that this campaign will one day lead to a standardized definition of bankruptcy fraud that is accessible to everyone. Only time will tell if this will happen.

Disclaimer: Please note that this article about bankruptcy fraud is intended to educate readers about bankruptcy issues. It should not be used as legal advice or as an alternative to adequate legal counsel. If you have questions about the bankruptcy process, please ask a local bankruptcy attorney in your area for competent legal advice.

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