Honesty

Chapter 7 Debtors’ Discharge Denied – Sold Furniture from House

January 14, 2018

Background:

  • Chapter 7 Debtors owned a 5 bedroom home.
  • House was foreclosed.
  • Debtors entered into an agreement with the Trustee to sell the furniture in their home at auction.
  • Without any approval, Debtors sold the furniture and never even mentioned the sale to their attorney.
  • Trustee came to the house to start the sale of the furniture and found that the house was empty.

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Bankruptcy Attorney Sentenced to 63 Months in Prison

January 5, 2018

Background:

  • Attorney required clients in Chapter 11 or Chapter 13 to deposit money with him.
  • He represented that the money would be held in trust for use during the bankruptcy; the money was used for other purposes.
  • Attorney would take money from clients; tell them that he was working out deals with creditors with the money. Instead he used the funds for his personal use.
  • The attorney robbed 48 clients of $3.4 million He would take money that he owed other clients and pass money to them.  Sounds like a Ponzi scheme to me.

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Amending Schedules Does Not Hide You Lied


April 30, 2017

Background:

  • Debtors filed for Chapter 7 bankruptcy.
  • Debtors did not list 2 inoperable trucks that they owned; debtors’ claimed these trucks at the time of the petition were property of deceased father.
  • Changed their schedules when the two trucks were questioned; amended their schedules to include one truck.
  • Plaintiff, former landlord of Debtors, evicted Debtors and objected to the Debtors’ discharge. Continue reading…

Liquor Store Owner Sentenced to Prison-False Statements

February 19, 2017

Background:

  • Small business owner sentenced to prison.
  • Filed Chapter 7 Bankruptcy.
  • Owner of a liquor store.
  • When the small business owner sold the liquor store for $171,000, he had his parents deposit the proceeds in their bank account.
  • Parents paid his expenses and gave him cash on a regular basis from the funds.
  • This income/profit was never recorded in the Bankruptcy Petition.

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Non-Dischargeable Debt for Disbarred Lawyer

October 11, 2016Bad lawyer

Debtor was a disbarred lawyer who did not want to pay a fee for a personal injury case that he received to another lawyer.

Background

  • Debtor was a disbarred attorney
  • Case settled for $1,980,000.
  • Disbarred attorney received $661,879.92 but did not pay the other attorney who was entitled to a split of the award.

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Judge Did Not Believe Debtor’s “Honest Mistakes”

August 10, 2016

A pro se Debtor filed a Chapter 7 bankruptcy.Liar_Liar_pants_on_fire_eslkidsgames.com_ESL_Games_ESL_game[1]

The Trustee continued to find “mistakes” in the Debtor’s petition.   The most significant were in the Statement of Financial Affairs (SOFA).   Each time, the Trustee would ask the Debtor to correct the errors and there were continual errors or incorrect figures.  As a result, the Trustee filed a Motion to Deny the Debtor’s Discharge.

The Debtor asserted that these were honest mistakes and he had no intent to defraud.  He could not blame his attorney since he did not have an attorney.

It is important to note that the Debtor was no stranger to calculations and numbers; he worked in the financial industry and has a master’s in business administration. Continue reading…

Debtor Can’t Discharge Firearm Debt

CaptureApril 19, 2016

Situation:

  • Plaintiff and Debtor were firearm collectors.
  • Plaintiff placed several firearms with the Debtor for safekeeping.
  • Debtor sold some of the weapons with Plaintiff’s permission.
  • Plaintiff asked for remaining firearms to be returned; Debtor did not return to Plaintiff
  • Plaintiff sued Debtor in State Court.
  • 2 years of litigation; Plaintiff won summary judgment $160,000 plus attorney’s fees and costs since Debtor did not respond.
  • Debtor then filed for Chapter 7 in an attempt to discharge this judgment.
  • Plaintiff filed an adversary proceeding objecting to Debtor’s discharge.
  • Bankruptcy court denied Plaintiff’s summary judgment since State Court case made no finding of facts; some of the counts could not be asserted in Bankruptcy Court.

Continue reading…

Is One Year In Jail Fair for Civil Contempt or Loss of Memory?

    March 1, 2016wily___go_to_jail___by_akarimms-d302wqm[1]

An owner of a company sold a  $13.8 million resort property in contempt of bankruptcy order.  The debtor could neither  explain nor account for what happened to that money or the resort.   The bankruptcy judge has taken a stand in this matter and is holding the debtor in contempt of court.

The Debtor has filed 6 appeals to get out of jail but the Judge is holding firm that he must explain more clearly where the money went. Continue reading…

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