Bankruptcy fraud occurs when people abuse the system and continue to obtain and use credit knowing that they can’t repay the money they are borrowing. There are also people who use bankruptcy to get out of situations that they have created themselves through bad faith and fraud.
The Office of the Superintendent of Bankruptcy (OSB) is responsible for supervising the administration of bankruptcy files in Canada and investigating cases where offences may have been committed. It may intervene before the Court in cases where bankrupts have failed to meet their obligations or when their conduct is deemed to be inappropriate. Trustees in bankruptcy and creditors may also make representations to the Court in such matters.
The most common offences committed under the BIA and the Criminal Code are when the bankrupt:
Fraudulently disposes of property before or after the bankruptcy;
Makes false entries in a statement of account or hides, destroys or falsifies a document related to his/her property or affairs;
Obtains credit or any other good through false representations;
Conceals or fraudulently removes property, or conceals claims or debts;
Obtains credit or engages in trade without informing the people involved that he/she is bankrupt (a person who is bankrupt and borrows $1,000 or more must inform the lender that he/she is bankrupt);
Refuses to respond fully and truthfully to questions posed during an examination held in accordance with the BIA.
See the Bankruptcy and Insolvency Act (sections 198 to 201) and the Criminal Code for a complete list of offences.
How to Report Bankruptcy Fraud
If you suspect fraudulent activities in connection with a bankruptcy file, contact the OSB at the following toll-free number: 1-877-376-9902. Your comments or complaints will be registered and reviewed by a bankruptcy analyst, who will conduct any necessary verifications or inquiries.
What are the penalties?
Here are a the criminal sentences in recent bankruptcy fraud cases.
Our qualified Alberta trustess are familiar with all aspects of
Canadian bankruptcy law. We currently have offices in
Calgary, Wetaskiwin, and Edmonton, Alberta, Canada.
Call now for a free consultation: 310-8888
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