Bankruptcy can provide relief to a debtor by discharging debts and providing a fresh financial start. However, bankruptcy does not provide protection from criminal prosecution. If, for example, the filer is a publicly traded company and the filer stole money from the company, there may be criminal implications because public companies have shareholders.
Bankruptcy laws are designed to address civil disputes between a debtor and their creditors. Criminal charges, on the other hand, involve the violation of criminal laws and are prosecuted by the government. Bankruptcy laws cannot override criminal laws, and a debtor cannot use bankruptcy to shield themselves from criminal prosecution.
In fact, filing for bankruptcy may even trigger an investigation into the debtor’s financial activities, especially if there are indications of fraud or other criminal activities. Bankruptcy fraud is a federal crime that carries severe penalties, including fines and imprisonment.
In summary, bankruptcy cannot protect a debtor from criminal prosecution. If a debtor is facing criminal charges, they should consult with a criminal defense attorney to address the charges and protect their legal rights.
About Finkel Law Group
Finkel Law Group, with offices in San Francisco and Oakland, has more than 40 years of experience assisting our clients navigate federal bankruptcy laws and state insolvency statutes. Our attorneys have the experience and expertise needed to help you and your management team successfully complete the liquidation or reorganization of your corporation, partnership or limited liability company.
When you need intelligent, insightful, conscientious and cost-effective legal counsel to assist you with the bankruptcy and reorganization issues confronting your company please contact us at (415) 252-9600, (510) 344-6601, or info@finkellawgroup.com to speak with one of our attorneys about your matter for a cost-free consultation.