Hindering Secured Creditors – What it Means & How Honest Mistakes are Charged

How Unintentional Bankruptcy Fraud & Hindering Secured Creditors Charges Occur

It’s not unusual for emotions to run high when a bank forecloses your house or a car dealer informs you your car is about to be repossessed. Given the difficult current economic times and the stress of trying to stay afloat, some people intentionally damage, destroy, or sell property that is secured by a creditor or bank. In other cases, a person who can no longer afford car payments might close out their bank account and deposit their savings in a friend’s account. When the car dealership takes action to recover delinquent payments, they can’t legally go after the car owner’s bank account since it’s been closed out.

In these kinds of cases, actions have been undertaken to prevent or hinder a creditor from collecting or securing property they have a claim against. Such actions, however, are illegal. Section 32.33 Secured Creditors, of the Texas Penal Code states:

• (1)”Remove” means transport, without the effective consent of the secured party, from the state in which the property was located when the security interest or lien attached.
• (2)”Security interest” means an interest in personal property or fixtures that secures payment or performance of an obligation.
• (b)A person who has signed a security agreement creating a security interest in property or a mortgage or deed of trust creating a lien on property commits an offense if, with intent to hinder enforcement of that interest or lien, he destroys, removes, conceals, encumbers, or otherwise harms or reduces the value of the property.
• (c) For purposes of this section, a person is presumed to have intended to hinder enforcement of the security interest or lien if, when any part of the debt secured by the security interest or lien was due, he failed:
• (1)to pay the part then due; and
• (2) if the secured party had made demand, to deliver possession of the secured property to the secured party.

Depending on the value of the property involved, hindering a secured creditor may be charged as a Class C misdemeanor (involving property valued at less than $20) or a felony in the first degree (involving property valued at $200,000 or more).

Hindering a Secured Creditor and Bankruptcy

Under the terms of § 32.33, it’s also a crime to undertake actions intended to prevent the execution of a lien. It’s also a crime to try and sell secured property in order to collection actions against you. While it may be difficult to sell a home or car with liens against them, selling equipment, appliances, or smaller items during bankruptcy may result in a charge of hindering a secured creditor and charges of bankruptcy fraud. As such, if you plan on filing for Chapter 7 or Chapter 13 bankruptcy, don’t try and transfer or sell property as it could result in a criminal charge of hindering a secured creditor and bankruptcy fraud.

Contact Dallas – Fort Worth Criminal Defense Fraud Attorneys

Proving that you intentionally acted to prevent a creditor from securing property and executing a lien is not always a simply, straightforward matter. If you’ve been charged with hindering a secured creditor, contact our firm at Clancy & Clancy today.