Bankruptcy Fraud

Paper Summary:

This paper discusses the problems involved with bankruptcy fraud, at the filing level and at the court trustee level. It then offers two solutions to these problems. The paper also includes a brief overview of how different countries deal with the issues involving personal debt and bankruptcy. Finally, the paper concludes with an ethical and reasonable recommendation based on an evaluation of the relevant research.

Table of Contents:
Introduction
Overview of the Bankruptcy System and Attempts to Solve its Problems through Reforms
Federal Agencies
Solutions to Bankruptcy Fraud
Bankruptcy in Other Countries
Conclusion and Ethical Recommendations

From the Paper:

"As an additional means of ensuring less fraud in the bankruptcy system, before hiring investigators and court trustees, these individuals should be subjected to thorough background checks before employment. In addition, the hiring personnel can verify that employers are validating information such as qualifications and work experience stated on resumes, as well as checking references. By hiring appropriately qualified employees, the criminal justice system and the bankruptcy courts will have taken one important step toward eliminating fraudulent and unethical financial filing practices. By implementing all of these recommendations, the future of the bankruptcy system and courts in the United States appears bright and will no doubt fall prey to another cycle of fraudulent bankruptcy filings."

Sample of Sources Used:

• Davydenko, S. & Franks, J. (2005). Do Bankruptcy Codes Matter? A Study of Defaults in France, Germany and the United Kingdom. Retrieved March 10, 2007, from http://www.rotman.utoronto.ca.
• Djankov, S., McLiesh, C. & Shleifer, A. (2007). Private Credit in 129 Countries. Journal of Financial Economics, forthcoming.
• Federal Bureau of Investigation (FBI). 2006. Bankruptcy Fraud. Retrieved March 12, 2007 from http://www.fbi.gov/.
• Feibelman, A. (2005). Defining the Social Insurance Function of Consumer Bankruptcy, American Bankruptcy Institute Law Review 13: 129-186.
• Gupton, G., Gates, D. & Carty, V. (2000). Bank Loan Loss Given Default, Moody's Investors Service.

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