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Bankruptcy Requirements – No Deception

Bankruptcy Requirements for Bankruptcy; full disclosure of assets
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Bankruptcy Requirements Include no Deception.     

It should go without saying that absolute full disclosure of assets is required.    Intent when acquiring debts is essential to file bankruptcy.   However, you can see from the following example that not everyone files bankruptcy for the “right” reasons.

Here is an interesting case wherein a used car dealer misrepresents intent to their Bank.

Background:

  • Debtor owned a used car dealership.
  • Debtor faces financial problems with his business debts.
  • Debtor through an auction sale contract purchases a 2007 Mercedes-Benz for $19K.
  • Car has a book value of $30K
  • Debtor represents the car is for personal use
  • Debtor approaches the bank for a loan.
  • Bank repeatedly verifies that the car was not purchased for resale.
  • Bank agrees to provide financing for the car purchase.
  • Debtor sells the car to a friend for $30K and never informed the Bank.
  • Payments are made for the loan for a short period of time
  • When the Debtor can no longer pay, he/she stops making payments.
  • Debtor files for a Chapter 13 bankruptcy.

Bankruptcy Requirements – No Deception – Outcome:

  • Bank files a Complaint objecting to the discharge of the car loan debt:
    • Debtor acted with intent to deceive the Bank
    • Debtor used the borrowed money to finance other debts.

Court Ruling:

  • The Court found that the Debtor made false representations.
  • Bankruptcy requirements are not met.
  • Due to the Debtor’s intentional and malicious nature of the actions, Court rules the Debtor should not benefit at all.
  • Debt to the Bank could not be discharged and cannot be included in the Chapter 13 Bankruptcy.
  • Intentional conversion of another’s property is a willful and malicious injury.
  • Section 523(a)(6) of the Bankruptcy Code argued by the Bank against the Debtor
  • Court rules in Bank’s favor.

Again, we see that the Bankruptcy Requirement is not met.    Getting the best legal advice and guidance when filing for bankruptcy is essential.   I always emphasize to my clients that  full disclosure is imperative

I do not take a case if I sense there is any deception.    Not only am I an attorney but I am also Board Certified.   My integrity, professionalism and guidance are stellar.

I meet with you and inform you of the requirements for bankruptcy and the benefits.    Let us meet to see if bankruptcy is a good option for your financial situation.

Call me for a free bankruptcy consult:  Ralph A. Ferro, Jr., Esq.  (201) 446-5904