Question regarding fraud....

[BKFraud]

This is long, but we have noticed some things about my sister in law and her husband who filed bankruptcy and would like some clarification.

When they filed for bankruptcy, we know they gave fradulent information. Are we correct in believing that, for instance, with jewelry, you can keep your jewelry up to a certain amount and the rest has to be sold? Or are we wrong. My sister in law and her husband stated they only had $1,500.00 worth of jewelry and we know that's a lie.

They also included other fraudulent info, but I am trying to make this brief.

The bankruptcy court stated they wanted my sister in law the find a job. She is 31 and healthy and perfectly capable to work - she chooses not to. She told them she was looking and she hasn't. She doesn't want to work - isn't wrong? And they have already defaulted on more of their bills and have planned a trip to Mexico for the fall. How can you do that after filing bankruptcy - is this sort of stuff allowed? Does the court wash its hands clean of you once you're done?

We feel they didn't use bankruptcy as a way to help themselves, but as a way to pay for bills they just didn't WANT to pay.

[dingdong]

This is long, but we have noticed some things about my sister in law and her husband who filed bankruptcy and would like some clarification.

When they filed for bankruptcy, we know they gave fradulent information. Are we correct in believing that, for instance, with jewelry, you can keep your jewelry up to a certain amount and the rest has to be sold? Or are we wrong. My sister in law and her husband stated they only had $1,500.00 worth of jewelry and we know that's a lie.

They also included other fraudulent info, but I am trying to make this brief.

The bankruptcy court stated they wanted my sister in law the find a job. She is 31 and healthy and perfectly capable to work - she chooses not to. She told them she was looking and she hasn't. She doesn't want to work - isn't wrong? And they have already defaulted on more of their bills and have planned a trip to Mexico for the fall. How can you do that after filing bankruptcy - is this sort of stuff allowed? Does the court wash its hands clean of you once you're done?

We feel they didn't use bankruptcy as a way to help themselves, but as a way to pay for bills they just didn't WANT to pay.

Some property in BK is exempt, depending on your state's exemptions.
Assets in BK aren't valued at retail price, since most property depreciates over time, the courts generally allow either appraisals or Garage sale prices for value of property such as furniture, personal belongings etc.

The court would not "tell' your sister she has to work, though the Trustee might suggest it at the 341.

IF your SIL is deaulting on their fincancial obligations, they can't file BK again for another 8 years, so they will have to live with the consequences of that decision.

Some people learn lessons, some don't, you really can't do anything about it.

[BKFraud]

Thanks Dingdong. My husband and I are really upset because, we don't judge those who file bankruptcy because we all make mistakes, fall into hard times and whether it is your own fault or not, it is not a pleasant thing to go through, we know - but we feel that my sister in law and her husband filed bankruptcy and really screwed the system (finished their basement and bought all new furniture, etc. and put it all - including basement on credit card) and racked up as much debt as they could before filing bankruptcy - used it to their advantage and they continue to rack up debt like it is nothing. They have no remose, they accept no blame. My brother in law makes a lot of money and should have had no problem paying off their debt with a budget, but that isn't fun, so it was "easier" for them to file bankruptcy and not have to pay it. So it is upsetting to us to see them continuing to live this way and upsets us when my sister in law says she "doesn't have to work"

I wasn't sure if any of that would be considered fraudulent.

[dingdong]

I suppose if they planned on purchasing items with the intent to BK on them, it would be fraud, but the BK code and "system" itself has ways to prevent such acts that are available to creditors.

Creditors are allowed to object to the discharge of certain debt if they believe the debtor was intent on filing when they incurred the debt.

Lets say your SIl charged 2000.00 worth of jewelry or bought something considered a luxury on the eve of BK, for this example say they filed June 1, 2009, and on May 25, 2009 they purchased 5 Louis Vuittons handbags on their Citibank MC.

Citibank could start a process called an AP , which is a lawsuit within a BK case and object to the discharge of that particular debt, since they were obvioulsly insolvent (broke) when they purchased the handbags.

And more than likely , the court would agree and rule in favor of Citibank and your SIL would still be liable for that debt and have no protection from that debt that BK affords.

So there are mechanisms in place to prevent such fraud, and creditors will use that right when it makes sense to do it.

[deadbroke99]

Sounds like your jealous. I would mind my own business. If your family is doing wrong, it may or may not come out. Karma will eventually get them. I woudn't want to get involved.

[Tbornetun]

I was going to say the same but didn't want to sound like a B!&#*

[deadbroke99]

LOL I guess I did sound that way huh!

[justbroke]

BKFraud, there are many check and balances within the system. If your relatives are gaming the system, it will usually come back and bight them. Planning a vacation post-discharge means absolutely nothing. Valuation of Jewelry and what exemptions they have and don't have, are legal matters which I'm guessing they consulted there BK Attorney on.

Many people are always "interested" in people who just came out of Chapter 7. They wonder why they still have "nice" things after it's over. This is a mere misunderstanding of what Bankruptcy is, what is allows, and what people walk away with.

It's surprising, but in Florida, a multi-millionaire can file bankruptcy and keep his free-and-clear muli-million dollar mansion! Yep... and people will ask "why do they get to keep that?" Well, it's the law that allows it.

BKFraud, you may find peace in what dindong wrote earlier. They can't receive another Chapter7 discharge in 8 years. So, if they are out living it up again... it will come back to get them... and this shouldn't be your worry.

[Tbornetun]

LOL I guess I did sound that way huh!

I didn't mean you did, I just meant that sometimes I tend to sound that way, especially in this situation. lol

[deadbroke99]

I do too because people are so judgemental.

[LuciluS]

BKFraud.

2 quick thoughts came to my mind:

What goes around, comes around
You reap what you sow

Talked to an old friend this past Wed. for over 2 hours as we lost in touch for about 4 years. Years ago, at different times, we both went through Divorces.
Lots, lots of negative and false statements by 'our so called friends'.

He lost both of his Young, but grown children because of the Divorce. My Dh lost his son when son was 20 yrs. old because of his divorce. I lost all of my so called girlfriends when I went through my divorce.

When talking, we both realized those who were unkind during our troubled times, are now in need of help. Gee, my twin sister, married my ex-husband in January of this year and what's so funny, it was ME who finally told my ex if her loved her, then darn it, ask her to marry you. My old friend said it was just in the last 6 months, he finally got over his bitterness & he's been divorced over 10 yrs.

So, with that said, just keep on doing the best you can. As justbroke stated: If they are circumventing the Bankruptcy Law, it will come back to bite them in the _____ (insert word). I'll use my word....in the Hiney LOL!

Luci

[eddiep]

I don't understand how this is any of your business? I don't want to be a b**ch either but honestly why do you care? Maybe they are having a hard time adjusting to a debt free lifestyle. Maybe they didn't learn their lesson. Who cares!?

[BigJohn]

Being the original poster is privy to only a small facet of what has transpired, it is impossible to draw a conclusion without all of the facts.

[JRScott]

To the OP,

It really depends on a lot of circumstances.

Valuations of property are done at yard sale values not retail.

However charging up excessive amounts on a credit card prior to filing can be seen as abusive. The CC company can file an AP as mentioned.

Also as pointed out if they haven't changed their habits they'll be back in the same situation soon, and they can't file again for 8 years.

You mentioned they'd filed but didn't say if they had been discharged. If you do believe you have good evidence that fraud has been committed you could as a concerned citizen contact the trustee of their bk estate and pass it on to him. However he may or may not act depending on how strong he feels the evidence is, or if he believes he'd recover enough to make it worth his time. It would also probably further strain your family relationship so it is probably something you should take time to carefully consider before doing.

[2Bshinyandnew]

This is long, but we have noticed some things about my sister in law and her husband who filed bankruptcy and would like some clarification.

When they filed for bankruptcy, we know they gave fradulent information. Are we correct in believing that, for instance, with jewelry, you can keep your jewelry up to a certain amount and the rest has to be sold? Or are we wrong. My sister in law and her husband stated they only had $1,500.00 worth of jewelry and we know that's a lie.


They also included other fraudulent info, but I am trying to make this brief.

Since my financial troubles started I have had to resort to selling my jewelry to make ends meet. Gold and platinum have maintained some of their value, maybe 15%-25% of retail, but gemstones are practically worthless. I was offered 5%-10% of retail for my gemstone jewelry. I didn't have anything unusual. So if you asked me 3 years ago how much my jewelry was worth I would have estimated it to be around $25,000 retail including some inherited pieces from my grandma. I would have wrongly guessed I could sell it for 1/2 retail. I had no clue, why would I? In reality, it was worth $1800 at pawn shop/jewelry resale values.

The bankruptcy court stated they wanted my sister in law the find a job. She is 31 and healthy and perfectly capable to work - she chooses not to. She told them she was looking and she hasn't. She doesn't want to work - isn't wrong?

Bankruptcy courts cannot tell someone to get a job, as justbroke said. The trustee may suggest it at the 341 meeting, but cannot require a person to get a job or seek employment like a family law civil suit where child support is involved, or a person receiving unemployed benefits.

And they have already defaulted on more of their bills and have planned a trip to Mexico for the fall. How can you do that after filing bankruptcy - is this sort of stuff allowed? Does the court wash its hands clean of you once you're done?

If this is so then they are stuck for another 8 years before they can file again. Its not likely that they will have good enough credit to really generate a huge amount of debt like we have seen happen to folks in 2003-2007. Especially in this economy, even people with good credit don't have easy access to gigantic credit lines any more.

I talk about going on a cruise...aahhh..dreams.If only

Once a case is discharged and then closed the court is pretty much done. One reason a case could possibly be reopened is if the trustee finds assets that were not disclosed on the petition or if the debtors have an inheritance within the 180 days after BK (I'm not sure if the 180 days starts at the filing date or discharge date?)

We feel they didn't use bankruptcy as a way to help themselves, but as a way to pay for bills they just didn't WANT to pay.

Bankruptcy is not an easy process regardless of which state you file in. It is a major life event. Even with an attorney guiding you it requires a whole lot of time, effort and ANXIETY on the debtors part. If your SIL and her husband passed the means test and provided all the documentation required and qualified for a Chapter 7, then they used the bankruptcy for exactly what it was meant to be used for. Unless there were charges of luxury items totaling $600 less than 90 days before filing or a cash advance less than 70 days before filing then your in laws followed the rules. The charging up of credit cards is a separate issue that each individual creditor would need to address.

If their income supported paying back their creditors, they would not have gotten a chapter 7 discharge. It's just not that easy to hide income from a bankruptcy trustee.