Bankruptcy trustees represent the interests of the creditors. During a bankruptcy case, they will closely monitor the information you provide about your finances when you apply for bankruptcy and ensure that you honor any agreements you make. If the trustee in your case suspects fraud, he or she has several tools to investigate it. Bankruptcy fraud is serious, so make sure you have a bankruptcy attorney on your side throughout your case. Here is what you can expect if a bankruptcy trustee launches a fraud investigation against you.
Rule 2004
Rule 2004 is part of the bankruptcy code. It grants power to bankruptcy trustees to investigate when they suspect that fraud has occurred. This rule gives trustees far-reaching powers and allows them to demand access to any information that could show that fraud has occurred. This includes any and all information about your financial condition, including property and liabilities you have. They can also demand further investigation into anything that might affect your right to obtain a bankruptcy discharge or that could impact how your bankruptcy is administered. For example, if the trustee thinks that you may have property that you didn’t disclose, Rule 2004 gives him or her the authorization to pursue a deeper investigation.
Adversary Proceedings
Adversary proceedings are cases held in bankruptcy court in which a trustee objects to all or part of a bankruptcy discharge. During these hearings, the court may allow the trustee to takeover hidden property, recover property you transferred to others before a bankruptcy, or even revoke the entire bankruptcy discharge.
Criminal Proceedings
If the bankruptcy trustee suspects that a crime has been committed, he or she may make a criminal referral to the courts. These cases are tried in federal court. Convictions are punishable by fines and jail time.
Don’t attempt to face bankruptcy court alone. The bankruptcy attorneys at Cutler & Associates, Ltd. can help you protect your rights as you pursue a discharge. Call (630) 343-0324 to speak to a bankruptcy attorney in Aurora today.