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Bankruptcy Basics Series Part 6: Bankruptcy Crime

Bankruptcy Crimes

Inaccuracies Can Be a Bankruptcy Crime

Bankruptcy crime: A debtor must be very accurate in his or her dealings with the court. Including filling out the statement of financial affairs and schedules accurately. These papers and a debtor’s testimony at the 341 Meeting are sworn to under penalty of perjury there can be severe consequences for violating this duty.

Let’s hear from a bankruptcy judge, Judge Paul M. Glenn

“Bankruptcy is not a step to be taken lightly or casually it’s a serious event. It has some real benefits. It will help people save their homes, it will help people relieve themselves from overwhelming debt, but along with those benefits there are some serious responsibilities that go along.

Make sure you file the paperwork

There’s a petition and financial statements that have to be filed when a person files their bankruptcy case. And these are signed under oath, these are sworn documents. There signed under oath and under penalty of perjury.

Watch out for fraudulent acts

Sometimes people will transfer vehicles or personal property or things to their relatives or their parents or their kin to hold for them for a period of time while they go through bankruptcy. That is a clearly a non-disclosure of assets and is bankruptcy fraud. So, any transfers that have been made within the last period of time have to be disclosed on the schedules.

In addition…

to the oath that goes along with the signature all the papers are signed under one of the rules of the bankruptcy courts and that is the signature’s a certification that to the best of the person’s knowledge and information and belief the representation are accurate, the facts are accurate.

The consequences of not being candid

And not being truthful on the schedules there is a criminal law that says that if anyone files a petition or files a document it makes a false or fraudulent representation and they are subject to criminal prosecution which provides for fines or imprisonment even up to 5 years or both of those.

It’s a serious crime to not be truthful

So, it’s a serious crime if there are material misstatements that could be prosecuted. The consequences of fudging are just too severe to risk. You risk the discharge, you risk committing a crime and the chances are likely that you’ll get caught because the trustees who review these schedules in the trustees meeting review thousands and they see thousands of people.

Be Honest

They know the questions to ask. The questions that they ask in the meeting have to be responded to under oath. And then the creditors come to the meeting and creditors are allowed to have their input as well. The likelihood that non disclosures will be found and if they are then there are serious consequences to that. Sloppiness and gross negligence are among those criteria that will lead to the conclusion that the admission is intentional. Take your time, get it right and be honest.”

Bankruptcy Basics Series Part 5: Creditors’ Meeting

Creditors’ Meeting

The Meeting of Creditors (341 Meeting)

Creditors’ meeting: As a debtor you’ll be required to appear at a meeting conducted by a trustee, this meeting is called a “Meeting of Creditors” but some people call it a “341 Meeting”. Because it is required by Section 341 of the Bankruptcy Code.

Let’s watch what happens in a 341 Meeting

“This is track number 14, this is the section 341 Meeting of Creditors for Rosario Lopez case number 0751316-CPM my name is Carol Lacheney, Chapter 7 Trustee, the debtor is present and I have verified her certificate of credit counseling. One creditor is present through counsel. Who do you represent, sir?”

“My name is Tim Sierra and I represent City Wide Credit Union.”

“Thank you. The trustee has verified the debtor’s photo ID and proof her social security number…”

Breaking it down

The trustee will verify your identity and ask you questions to verify the accuracy of the information that you filed with the court. The trustee may also ask you questions about your most recent tax return, which you must give the trustee in advance of the meeting. Creditors are given the opportunity to ask questions about your income, property and debts. Secured creditors may wish to ask about the status of property. Securing their debt and whether you intend to keep the property. And if so how you intend to pay for it.

Utah Debt & Bankruptcy News February 2018

Utah Debt & Bankruptcy News February 2018 Read recent and local events regarding Utah debt news and bankruptcy related topics. Being informed is a vital part of of your Start Fresh solution. Dropping Student Loan Debt Would Stimulate Economy, Report Says Utah Public Radio-February 22, 2018 Student loan debt in the U.S. has reached $1.4…
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Bankruptcy Basics Series Part 4: Filing Bankruptcy

Filing Bankruptcy

How Do I File a Bankruptcy Case?

Filing bankruptcy: Before you file a bankruptcy case you must complete credit counseling provided by a government approved agency. The purpose of this counseling is to explore alternatives to bankruptcy in your particular situation.

Counseling in Bankruptcy

You must obtain from the agency a certificate describing the counseling services you received. This certificate must be filed with the court as an attachment to your statement of compliance with the credit counseling requirement. There is an official court form that must be used for this purpose.

Counseling Options

Approved agencies may be found by calling the bankruptcy court in your area or by accessing a list found on the bankruptcy court’s website. Many agencies offer online counseling sessions. The cost varies and some agencies will reduce or waive the cost depending on your circumstances.

It is important to obtain this counseling prior to filing, if you do not the court can dismiss your case and you may lose any filing fee you’ve already paid.

If You Must Refile

Even if you refile you may lose important bankruptcy rights. And may not be able to stop the collection activities of your creditors. You also may be required to pay a second filing fee. The counseling requirements can be waived only under very limited circumstances, so you need to understand this requirement and take care of it before you file.

Filing a Petition

To start a bankruptcy case, you file what is called a petition with the bankruptcy court in the federal judicial district and division where you live. The petition contains a request for relief under one of the chapters of the bankruptcy code. You must file a statement regarding various financial matters.

Schedules & Means Test

And disclose all creditors and assets on forms called “schedules” and you must fill out a form showing whether you can file under Chapter 13 rather than Chapter 7 given the amount of money that is left over each month after deducting reasonable household expenses this form is called the “Means Test” form.

Filing Fees

Furthermore, most debtors must pay a filing fee. The amount of your filing fee depends on the type of bankruptcy case you file. The fee is payable in cash, certified check or money order and may sometimes be paid in 4 monthly installments. If your income falls below a certain amount you may request that the filing fee be waived. If you do not file the required documents or pay the filing fee in a timely manner the court may dismiss your case.

Also, you must attend a meeting of creditors which we’ll talk about next. Failure to attend this meeting may also lead to dismissal.