Bankruptcy Crime

Those who declare bankruptcy (i.e., bankrupts) have specific duties and responsibilities to fulfil. One of the most common forms of bankruptcy crime is the concealment of assets that belong to the debtor. There have been many cases where a bankrupt has hidden an asset such as cash or property in order to avoid paying it over to creditors. Another form is the planned bankruptcy, which is sometimes called a bustout. The classic planned bankruptcy involves the purchase of large quantities of inventory on credit by a business that then that business liquidates the inventory as soon as possible. The criminals then close up the business and leave the suppliers unpaid. Lenders and suppliers can take simple steps to avoid becoming victim to such schemes. These steps include following:

• careful credit granting procedures,
• visiting customer locations periodically,
• and paying close attention to any rising receivables.

If you are a business owner who extends credit to people or businesses, you must be aware of the risks associated with providing such credit. There are people out there who plan to go bankrupt in order to fleece individuals and companies out of as much money as possible. By the time a bankruptcy is declared, it will be too late. Any assets will have disappeared.

If you have been the victim of a bankruptcy criminal tell us about your story. On Fraud Squad TV, you will see stories about this type of crime.

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