Believe it or not, more and more attorneys across the country are reporting that new and potential clients are asking them that very question! It might sound ridiculous if you’re familiar with the law but if you’re not, you’re at risk for being misled and misinformed (to put it kindly) by aggressive collectors with some pretty outlandish practices.
It is true that committing fraud on the bankruptcy court, your creditors, or the trustee can indeed land you in hot water. And there are provisions in the U.S. Code of Laws that make other acts criminal in nature, subject to imprisonment, fines, or both upon conviction. This is another reason why it’s so crucial to allow a lawyer to help you navigate these rocky shoals. But filing itself – without more – is not a criminal act, despite what your creditors would like you to believe. Remember: it’s in their best interests to keep you away from that bankruptcy filing, because they know once you file, they’re not likely to collect every cent of their outrageous fees and interest charges.
Defrauding tenants, forging a bankruptcy judge’s signature, committing perjury during the creditor’s meeting – these are bankruptcy-related acts that will result in criminal penalties and possible jail time. Filing a petition in good faith? Not a crime.
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My clients are frequently concerned that they might be thrown in jail if they don’t pay their credit card bills. I explain that we outlawed debtor’s prison well over 200 years ago in this country. There is nothing criminal about simply not paying your debts.
Cathy Moran
I too sometimes encounter surprised looks when I inform people that failure to miss a credit card payment or two will not lead to immediate incarceration or a criminal indictment. As long as you are honest and sincere in your financial dealings, you are not committing a crime.
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