How can I file for bankruptcy without the risk of going to jail? 16 Answers as of July 30, 2011

4 years ago, when I was 18, I lied about my income on multiple auto loan apps, and bought several cars with fake pay stubs and never payed for them. About $350,000 worth. All have been repossessed. Now, years later, I am 22 and I see that what I did must have been illegal. I owe all of this debt, with many judgments, that would truly take me a lifetime to pay. These banks seem to never have caught on to this. I assume I would file chapter 7 because I own nothing but Im scared that if I do I may be sent to jail for this childish mistake. What should I do?

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Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
You won't necessarily go to jail. If you file a chapter 7 bankruptcy proceeding the creditors may or may noy object to the dischargeability of the debts involving misrepresentations on loan applications.
Answer Applies to: Georgia
Replied: 7/25/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
See a lawyer. Do it now. Find one at NACBA.com. Chapter 13 will set you up with a payment plan and avoid the problems you will have in chapter 7. Good for you for realizing your mistakes. Many people far older than you never see the error of their ways.
Answer Applies to: California
Replied: 7/25/2011
Dearbonn Law Offices
Dearbonn Law Offices | Ajibola Oluyemisi Oladapo
You risk going to jail if you file bankruptcy and the Bankruptcy court becomes aware of your fraud.
Answer Applies to: Washington
Replied: 7/24/2011
Benson Law Firm
Benson Law Firm | David Benson
You should not talk about this on a public bulletin board. Although Ohio's statute of limitations for civil fraud is 4 years and you may be off the hook there, criminal fraud is 1 year from the discovery of the offense. You want to let sleeping dogs lie. And besides, it is true that debts incurred through fraud are, in most cases, nondischargeable. But look at it this way: If you don't have any assets to seize, your creditors may not bother coming after you since you're probably judgment-proof. In fact, they may just write off the debt as uncollectible.
Answer Applies to: Ohio
Replied: 7/24/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
There is no debtor's prison in the United States. However, if you falsely make statements in your bankruptcy you can go to prison or been fined or both. If you have incurred debt by fraud you shouldn't file chapter 7. Chapter 13 is a better alternative since fraud can be discharged.
Answer Applies to: California
Replied: 7/24/2011
    Law Offices of Daniel Moulton
    Law Offices of Daniel Moulton | Daniel Moulton
    Jail is unlikely. In 17 years, I have yet to see a bank go back to the application process to file charges. Various statutes of limitations apply too.
    Answer Applies to: Illinois
    Replied: 7/24/2011
    Mauritz Van Niekerk, Attorneys at Law
    Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
    The Bankruptcy Court is not the Criminal court. You will testify under oath but they do not report unless someone asks for the transcripts. I suggest cleaning yourself up with u Chapter 7 and then START FRESH. If something comes out about your situation deal with it then BUT START OVER and start doing things right. Without Bankruptcy you cannot start over.
    Answer Applies to: New York
    Replied: 7/24/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Most people would not agree that major fraud such the one you describe is a "childish mistake." In fact, what you did must have been so sophisticated that fooled the "experts" at the banks. Of course, everyone knows that from 2002 to 2008 approx. the bank executives, who were getting huge bonuses, were just handing out money without verifying anything although it was clear that hundreds of thousands of loan applications were fraudulent. In effect, those bank executives, also because of greed, were defrauding the stockholders, investors and even the taxpayers who had to rescue the banks. Since those bank executives never went to jail for fraud in the billions and kept their bonuses, it would be ironic if they put you in jail for a mere $350,000 while those that stole hundreds of millions in fraudulent bonuses got to keep it all, inbi It is unlikely that filing a bankruptcy case would affect whether or not you are prosecuted for fraud. It seems that the creditors would have reviewed the accounts when you defaulted and would have discovered the fraud at that time. The lawsuits by the creditors would have included a cause of action (accusation) of fraud. If you were not sued for fraud then it seems that the fraud issue was ignored and the banks would have a hard time objecting to a discharge in your bankruptcy case because of fraud if they ignored that issue in the civil lawsuits for the debts. Nevertheless, your question about being prosecuted for credit fraud should be directed to a criminal law attorney. That attorney might recommend that you wait until the statute of limitations for the crimes you committed lapses. That might be as long as 8 years after the crime could have been discovered by the bank. Again, contact a criminal law attorney and particularly one that specializes in white collar crimes.
    Answer Applies to: California
    Replied: 7/24/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    Issues like you are talking about (involving fraud) are often not dischargeable in bankruptcy.
    Answer Applies to: Florida
    Replied: 7/24/2011
    Law Offices of Michael J. Berger
    Law Offices of Michael J. Berger | Michael J. Berger
    Sorry, but your actions sound like more than a "childish mistake" to me. They sound like multiple felonies. It is still possible that your past will catch up with you. A bankruptcy filing could cause the lenders that you defrauded to focus on your conduct and could lead to one or more complaints to deny the dischargeability of your debts or even a referral for criminal prosecution. You have two reasonable choices: Do not file bankruptcy now, let more time go by ; or (2) file bankruptcy and see what happens. I vote for option #1.
    Answer Applies to: California
    Replied: 7/24/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Fraudulent debts are not discharged in bankruptcy. A pattern of fraudulent debts can result in a complete denial of discharge. In some cases falsifying loan apps is a crime. See a lawyer, determine the pros and cons of filing and make your decision based on that discussion. Yes, with or without a bankruptcy, there is a risk of jail. There is also some possibility, depending on detailed facts, of a better ending. See a lawyer ASAP.
    Answer Applies to: Georgia
    Replied: 7/23/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    You're correct that the purchases were fraudulent. The creditors would have to object on those grounds, however. So you take your chances.
    Answer Applies to: Virginia
    Replied: 7/23/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Be honest and forthright
    Answer Applies to: Maryland
    Replied: 7/23/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    You won't be sent to jail, but the lenders may pursue you for a non-discharcheability action. In this type of case, it is particularly important to hire a qualified attorney.
    Answer Applies to: Oregon
    Replied: 7/23/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    It is not common, even in the case of fraud, for a bankruptcy to result in criminal charges. However, if you applied for credit using a fraudulent application, then even if you are not pursued criminally, you will not be able to discharge these debts in bankruptcy. The creditors will file adversary proceedings and will have the debts deemed non-dischargable. Bankruptcy will not help you with these debts.
    Answer Applies to: Colorado
    Replied: 7/23/2011
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