I Was Defrauded and Now I’m Filing Bankruptcy

What Should I Expect?

If you were scammed, defrauded, manipulated, or pressured into debt, and bankruptcy now feels like the only way out, you are not alone — and you are not a failure.

Bankruptcy courts see this situation every day:

• Romance scams

• Contractor fraud

• Investment scams

• Identity theft

• Family or partner financial abuse

• High-pressure sales schemes

• Forged or coerced loans

This page explains what bankruptcy looks like after fraud, what trustees focus on, what risks exist, and how to protect yourself.

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First — This Is Not Your Fault

Being defrauded does not mean:

• You were careless

• You acted in bad faith

• You don’t deserve relief

Fraud victims file bankruptcy frequently. The system is designed to give honest people a way out — even when the debt came from someone else’s wrongdoing.

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How Fraud-Related Debt Is Treated in Bankruptcy

The Good News

In most cases:
✔ Credit card debt caused by fraud is dischargeable
✔ Loans taken because of fraud are dischargeable
✔ Personal liability for scam-related debt can be wiped out

Bankruptcy focuses on your intent, not the scammer’s actions.

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What Trustees Will Look At (And What They Won’t)

Trustees DO Look At:

• Whether you personally benefited from the money

• Whether assets still exist

• Whether transfers were made to others

• Whether everything was disclosed

Trustees Do NOT Usually Care About:

• Whether you were “naive”

• Whether the scam was obvious in hindsight

• Whether you tried to fix it afterward

Honesty matters far more than the story itself.

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Common Fraud Scenarios — And What to Expect

🔹 Romance or Relationship Scams

Very common. Trustees usually focus on:

• Where the money went

• Whether you still have assets

• Disclosure of transfers

The fact that the money is gone is not a crime.

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🔹 Contractor or Home Improvement Fraud

Often involves:

• Loans taken for work never done

• Equity or credit used under pressure

The debt is usually dischargeable.
Documentation helps, but perfection is not required.

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🔹 Investment or Crypto Scams

Trustees may ask:

• How much was invested

• When it was lost

• Whether you still control any funds

Loss alone is not misconduct.

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🔹 Financial Abuse by a Spouse, Partner, or Family Member

This includes:

• Coerced loans

• Forged signatures

• Pressure to take on debt

Bankruptcy courts recognize financial abuse — especially when documented.

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Will the Trustee Accuse Me of Fraud?

Usually, no — unless:

🚩 You hid assets
🚩 You lied about transfers
🚩 You moved money after deciding to file
🚩 You continued sending money secretly

Being defrauded ≠ committing fraud.

The biggest risk is non-disclosure, not the fraud itself.

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Do I Need to Report the Fraud?

You are not required to:

• File a police report

• Sue the scammer

• Recover the money

However:

• Prior reports help credibility

• Documentation is useful

• But lack of recovery does not hurt your case

Many scammers are untraceable. Courts understand this.

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Can I Still Sue the Scammer After Bankruptcy?

Sometimes, yes — but with limits.

• Lawsuit claims become part of the bankruptcy estate

• Trustees may control or share recovery

• Some claims can be exempted

This requires case-specific analysis.

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Chapter 7 vs Chapter 13 After Fraud

Chapter 7

• Most common after fraud

• Eliminates debt quickly

• Focus is on honesty and disclosure

Chapter 13

• Used if income/assets require it

• Fraud-related debt is still usually dischargeable

• Plan payments are based on ability, not blame

Fraud does not force you into Chapter 13.

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What You MUST Do to Protect Yourself

✔ Disclose all transfers — even painful ones
✔ Explain the fraud clearly to your attorney
✔ Provide documents you have (texts, emails, bank records)
✔ Do not hide embarrassment
✔ Do not try to “fix” anything yourself

Silence hurts cases. Transparency saves them.

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What You Should NOT Do

❌ Do not repay scam-related debt selectively
❌ Do not transfer assets to “undo” the fraud
❌ Do not lie out of shame
❌ Do not assume “they’ll think I’m stupid”

Trustees see this constantly.

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Emotional Reality (Important)

Fraud-related bankruptcy often comes with:

• Shame

• Anger

• Grief

• Loss of trust

These reactions are normal. Bankruptcy is not a moral judgment — it’s a legal reset.

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The Bottom Line

✔ Being defrauded does not disqualify you from bankruptcy
✔ Fraud-related debt is usually dischargeable
✔ Trustees care about honesty, not embarrassment
✔ You can get a fresh start

Bankruptcy is often the cleanest way to stop the damage when fraud has already happened.

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Talk to a Bankruptcy Attorney Who Understands Fraud Cases

Fraud-related bankruptcies require compassion + precision.

Ginsburg Law Group helps clients who:

• Were scammed or defrauded

• Took on debt under pressure or manipulation

• Are overwhelmed and ashamed

• Need a fresh start without judgment

👉 Contact us today for a confidential consultation. You do not have to explain everything perfectly — just honestly.

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Romance Scams and Bankruptcy: What Victims Need to Know

If you were targeted in a romance scam and now face overwhelming debt, you are not alone — and you are not stupid, reckless, or irresponsible. Romance scams are one of the most common reasons people end up filing bankruptcy today.

Bankruptcy courts see these cases regularly.

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How Romance Scams Lead to Bankruptcy

Romance scams often involve:

• Gradual emotional manipulation

• Requests for “temporary help”

• Pressure to take out loans or use credit cards

• Repeated transfers to the scammer

• Isolation and secrecy encouraged by the scammer

By the time the fraud is uncovered, the money is usually gone.

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Is Romance-Scam Debt Dischargeable?

👉 Yes, in most cases.

Debt caused by a romance scam is usually:
✔ Unsecured
✔ Not based on your wrongdoing
✔ Dischargeable in bankruptcy

Bankruptcy focuses on your intent, not the scammer’s deception.

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What Trustees Will Look At

Trustees typically want to know:

• Where the money went

• Whether any assets remain

• Whether transfers were disclosed

They generally do not accuse victims of fraud simply for being scammed.

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Do I Need a Police Report?

No — a police report is not required.

However, if you have:

• FTC reports

• Police reports

• Bank fraud documentation

Those can be helpful, but lack of documentation does not bar relief.

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Emotional Reality (Important)

Romance-scam bankruptcies often involve:

• Shame

• Grief

• Anger

• Loss of trust

These emotions are common — and courts do not punish people for being human.

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Bottom Line

✔ Romance-scam debt is usually dischargeable
✔ Trustees care about honesty, not embarrassment
✔ Bankruptcy is often the cleanest reset

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Talk to a Bankruptcy Attorney Without Fear of Judgment

Ginsburg Law Group regularly helps romance-scam victims:

• Eliminate scam-related debt

• Handle trustee questions safely

• Move forward with dignity

👉 Contact us for a confidential consultation. You will be treated with respect.

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Identity Theft and Bankruptcy: Do I Need to File?

Identity theft creates confusion because some identity-theft debts aren’t really yours — but they still ruin your life.

This page explains when bankruptcy helps — and when it isn’t necessary.

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When Identity Theft Alone May NOT Require Bankruptcy

You may not need bankruptcy if:

• The debts were truly unauthorized

• Creditors acknowledge the fraud

• Accounts are being removed

• No additional financial fallout exists

In those cases, fraud disputes may be enough.

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When Bankruptcy Is Appropriate After Identity Theft

Bankruptcy may be appropriate if:

• Fraudulent debts were mixed with real debts

• You were pressured into “fixing” accounts

• Your credit collapsed anyway

• Lawsuits or garnishments started

• Stress and uncertainty became unmanageable

Bankruptcy resolves everything at once.

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Trustees and Identity Theft

Trustees typically:

• Accept identity-theft explanations

• Focus on disclosure, not blame

• Do not require perfection in documentation

Identity theft ≠ bankruptcy fraud.

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What You Should Disclose

✔ All disputed debts
✔ Fraud reports if available
✔ Ongoing disputes
✔ Any payments made under pressure

Transparency is key.

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Bottom Line

✔ Identity theft does not disqualify you from bankruptcy
✔ Bankruptcy can stop the chaos even if fraud disputes are ongoing
✔ Relief is about your financial reality — not fault

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Talk to an Attorney Before Deciding

Ginsburg Law Group helps clients determine whether bankruptcy or fraud remediation — or both — is the best path.

👉 Contact us if identity theft has spiraled into financial crisis.

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Financial Abuse and Bankruptcy: A Way Out

Financial abuse is real — and bankruptcy law recognizes it.

Financial abuse can include:

• Being forced to take out loans

• Being pressured to co-sign or borrow

• Having money controlled or monitored

• Being isolated from financial information

• Having debt run up in your name

This happens in marriages, relationships, and families.

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Bankruptcy Does NOT Blame Abuse Victims

Bankruptcy courts:

• Do not punish victims

• Do not require confrontation

• Do not require proof beyond disclosure

What matters is your current financial situation, not how you got there.

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Is Abuse-Related Debt Dischargeable?

👉 Usually yes.

Debt incurred through:
✔ Coercion
✔ Pressure
✔ Emotional manipulation
✔ Control

Is typically dischargeable unless tied to specific exceptions (rare).

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Special Considerations

• Safety planning may be important

• Address changes can be protected

• Communication can be handled through counsel

Your attorney can help protect privacy.

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Bottom Line

✔ Financial abuse is recognized
✔ Bankruptcy can provide a clean break
✔ You are not required to stay trapped

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Talk to a Bankruptcy Attorney Who Understands Abuse Dynamics

Ginsburg Law Group helps clients:

• Escape financially abusive situations

• File discreetly and safely

• Rebuild independence

👉 Contact us for a confidential consultation.

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Fraud-to-Bankruptcy Decision Chart

Was I Defrauded — and Is Bankruptcy the Right Step?

Use this as a general guide, not legal advice.

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Step 1: Did You Lose Money or Take on Debt Because of Deception or Pressure?

⬇️ Yes → Step 2
⬇️ No → Bankruptcy analysis still applies

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Step 2: Is the Money Gone or Irrecoverable?

⬇️ Yes → Bankruptcy often appropriate
⬇️ No → Recovery options may exist

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Step 3: Are You Facing Collections, Lawsuits, or Garnishment?

⬇️ Yes → Bankruptcy strongly indicated
⬇️ No → Step 4

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Step 4: Can Fraud Disputes Alone Fix the Situation?

⬇️ Yes → Bankruptcy may not be needed
⬇️ No / Unsure → Bankruptcy may simplify everything

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Step 5: Emotional & Practical Reality Check

⬇️ Overwhelmed / exhausted / unsafe
✔ Bankruptcy can provide relief and stability

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Key Takeaway

✔ Fraud does not disqualify you from bankruptcy
✔ Shame should not delay relief
✔ Bankruptcy is a tool — not a judgment

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Final Reassurance

People file bankruptcy after fraud because someone else broke the rules — not because they did.

Bankruptcy exists to restore balance when life goes wrong.

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Talk to a Bankruptcy Attorney You Can Trust

Fraud-related bankruptcies require care, discretion, and compassion.

Ginsburg Law Group helps clients:

• Recover from scams

• End abuse-related debt

• Stop collections

• Start over without judgment

👉 Contact us today for a confidential consultation

BANKRUPTCY TEAM

AMY GINSBURG – aginsburg@ginsburglawgroup.com

GRACIE KLEIN – gklein@ginsburglawgroup.com

NICOLE LOMBARDI – nlombardi@ginsburglawgroup.com