28 May Will I go to jail if I file bankruptcy?
A person will not go to jail or be arrested for filing bankruptcy. The Bankruptcy law is intended to allow people who have so many debts to have a fresh start by eliminating unsecured debts. However, many people have a common belief that filing bankruptcy is somewhat equivalent to a crime. This could be because of the harassments made by collectors who often say anything in an effort to collect a debt. The truth is that by filing bankruptcy one does not become a criminal. However if you commit bankruptcy fraud, this could lead you to jail.
Question: What would happen if I committed bankruptcy fraud?
Answer: You can be penalized and go to jail if you committed bankruptcy fraud. Bankruptcy fraud is usually going to center on not disclosing information that is requested by the bankruptcy court and/or the trustee, or disclosing fraudulent information on such a scale that you are trying to perpetrate a fraud on the bankruptcy court.
Question: What are the bankruptcy-related acts that will result in penalties and possible jail time?
Answer: Among the bankruptcy-related acts that will indeed land you in hot water are the following:
- Forging a bankruptcy judge’s signature,
- Committing perjury during the creditor’s meeting
- Falsely testified under oath
- Declaring false statements in the bankruptcy forms
- Concealing income and assets
- Manipulating information in the bankruptcy forms
Question: What shall I do if a creditor or collection agency informs me that I will go to jail if I don’t pay my debts?
Answer: Filing bankruptcy is not a criminal act, despite what your creditors would like you to believe. Remember: it’s in the best interests of the creditors to keep you away from filing bankruptcy because once you file, they are not likely to collect every cent of their outrageous fees and interest charges. Under the terms of the Fair Debt Collections Practices Act (FDCPA), debt collection agencies cannot engage in abusive, harassing, or threatening behaviour when attempting to collect on a debt. This means collection agencies cannot repeatedly call you at home or work, send threatening letters, or use abusive language when talking to you over the phone. You may opt not to pick up the phone and not to talk to your creditor to avoid harassment.
Note: This is not a legal advice. Our Law Firm has successfully helped clients in filing for bankruptcy for the last 13 years.