Can Criminal Charges be Filed After a Loan is Discharged in Bankruptcy?
Full Question:
Answer:
Whether or not the prosecutor decides to prosecute is under his discretion, but must be supported by reasonable grounds to believe a crime was committed. As long as you did not commit fraud in regards to the loan, you have not committed a crime. Some of the factors that may be considered are whether or not fraud was involved in the bankruptcy proceeedings, whether the debt was disclosed in the case, and whether the friend filed an objection to the debt being discharged.
The answer may depend in part on whether the creditor was listed in bankruptcy and the debt was discharged. If the creditor of a discharged debt continues collection attempts it is a violation of Federal Bankruptcy Law and subject to court sanction. A discharged debtor may send a letter telling the creditor that if it continues to try to collect funds that have been discharged under federal law, an adversary proceeding against the creditor may be filed in the United States Bankruptcy Court. The letter should also enclose a copy of the discharge order. The bankruptcy court has the power to hold the persistent creditor in contempt of court. The court also may fine the creditor. We recommend you consult a local criminal attorney who can review all the facts and documents involved.
Bankruptcy fraud includes filing a bankruptcy petition or any other document in a bankruptcy case such as the bankruptcy schedules, or statement of financials affairs, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud also includes making a false or fraudulent representation, false claims or promises in connection with a bankruptcy proceeding, before or after the filing of the bankruptcy case, for the purpose of attempting to execute or conceal a scheme or artifice to defraud. Bankruptcy fraud is a crime punishable by a fine, or up to five years in prison, or both.
If a debtor or anyone else, knowingly and fraudulently conceals property of the estate from a receiver, custodian, trustee, marshal, or other court officer it can be a separate offense, and may also be punishable by a fine, or by up to five years in prison, or both. The same penalty may be imposed for knowingly and fraudulently concealing, destroying, mutilating, falsifying, or making a false entry in any books, documents, records, papers, or other recorded information relating to the property or financial affairs of the debtor after a bankruptcy case has been filed.
For further information please see:
http://bankruptcyfraud.typepad.com/
http://www.earthtimes.org/articles/news/50240.html
