What should we do?

[Priceless ProSe]

Am I the only one that sees a problem (several actually) with the adivce the attorney is giving her?

If you think that it will "all be ok" if the trustee finds the 7k that you neglected to mention I would disagree. No matter how you used it, its still perjury right.

And it (the cart/stand) actually is yours because the money to buy it is money that your brother owes you. But I concede.

Either you will get away with it, or learn a hard lesson. I truly hope for the former. I wont bug you anymore.

Edit: after careful review, and a morals/gut check, I no longer hope for he "former"

[FreshLikeADaisy]

Am I the only one that sees a problem (several actually) with the adivce the attorney is giving her?

No, you're not. In essence, this attorney is suborning perjury by advising this client to commit in deed what will be denied (at least by overt omission) in the filing. She will then sign, at multiple points in the paperwork, and again swear at the 341 under oath, that everything she has presented in her filing is true and correct and complete to the best of her knowledge, when it clearly is not.

I have a very serious problem with this myself, not only from the perjury standpoint, but from the standpoint that an atty who advocates lying cannot himself be trusted. At all. An atty who says, "Yeah, sure, a fraudulent conveyance that doesn't look like a fraudulent conveyance on paper should be just fine," doesn't exactly have her best interests at heart. (The fraudulent conveyance would be, in this case, the transfer of the repayment of her brother's loan to the daughter in return for the daughter purchasing/titling the trailer.) But then again, it's not his ass if she gets busted: everything she says that he told her is absolutely deniable. She's the one who will be signing her name to it, and if she gets busted and charged in federal court with perjury and attempting to conceal assets, he will simply walk away from it all, denying any involvement... but he will have gotten her fee.

To think better of him and his advice is extremely foolhardy. But from the original poster's various statements, it is clear that she feels that this is acceptable behavior, and I can't change that. It's a moral thing, and it's her morals, not to mention her serious financial risk. If she does this, and it bites her back, it will not be a lesson anyone else can rescue her from. She seemed pretty comfortable with skirting the truth in all of her posts; the only question was if it would be a problem. No offense, but there it is.

If you think that it will "all be ok" if the trustee finds the 7k that you neglected to mention I would disagree. No matter how you used it, its still perjury right.

And it (the cart/stand) actually is yours because the money to buy it is money that your brother owes you.

It's not just that: the "facts" as presented did change between posts.

But I concede. Either you will get away with it (most likely), or learn a hard lesson. I truly hope for the former. I wont bug you anymore.

I personally resent the hell out of being asked, whether directly or not, to assist in someone's overtly dishonest use of the bk system for personal gain, to keep more than what the bk court and bk law allows while still receiving a discharge of their debt as though they were truly destitute. So, so many people have lost everything and are being made to jump through huge hoops because of others who twist and pervert the process to deceive the court and their creditors. Every so often, someone gets on here and makes a similar post, and instead of dropping the idea of deceiving the court in their filing, it becomes clear that their true intent is only to find a way to keep their stuff above and beyond what the law allows. I have no use for this.

Frankly, Liz, **IF** you have assets that you could readily sell, or in this case, a debt that can and will be collected by you and could be used to pay down your debts, and you find yourself in the position of having to lie and conceal in your filing to keep your assets safe from the court and your creditors, then you truly are NOT eligible for Chapter 7 and you are a burden to those who are truly destitute. Shame on you.

[Priceless ProSe]

So, so many people have lost everything and are being made to jump through huge hoops because of others who commit bk fraud.

I really never thought of it this way, thank you. I was going back and forth in my mind why I should care, I am glad you gave me this rock to stand on.

[TEW]

I think SMELLS is what came to mind

[FreshLikeADaisy]

I really never thought of it this way, thank you. I was going back and forth in my mind why I should care, I am glad you gave me this rock to stand on.

I'm glad you brought it up. I was really disgusted, and then when you posted I just kind of bubbled forth.

I actually signed off, went and thought about it, and then thought about it some more, because that's one of the harshest posts I've ever written... and not only am I not even remotely interested in dialing down the intensity, I regret I cannot make it stronger. It just made me madder and madder.

To clarify: Liz's first post says that she is thinking about buying a food concession trailer, and her question is whether she can "buy it/register it in [her] adult daughter's name" to avoid having it "classified as an asset and [Liz] having to "buy" it back from the Trustee".

Her second post states that she will not be purchasing it on credit, but with "money that [her] brother owes [her]." Please note that Liz will thus own the equity in it outright, making it an asset subject to liquidation by the bk court if Liz cannot title it to someone else (i.e. the daughter). Liz notes that she already knows she will not have available exemption dollars to exempt it, and again says that her object is to avoid having to "buy back" this asset from the trustee. Liz then adds this statement: "Our daughter has the money to buy it, so I'm not sure how... it could be possibly deemed fraudulent since she has the money to buy it anyways? We would set it up as us being employees of her business," even though she has already stated twice that the trailer would belong in principle to herself, and thus she would not be an "employee" of her daughter in actual fact, but self-employed with only the actual title of the trailer in the daughter's name. In each post, there is no clear intent to actually be employed by the daughter or to enter into a true partnership with the daughter, only to arrange the purchase and title in such a way as to conceal and/or protect the trailer from Ch7 liquidation.

In Liz's third post, she states (emphasis mine):

...The attorney said that it would be ok to get the concession trailer in our daughter's name! He said it would not be deemed fraudulent because we are not transferring any property to her....she is buying it, titled in her own name, from the start. We are simply working it, sort of like being silent partners, but the concession trailer itself could not be taken away or looked upon as equity, as it is not ours for the trustee to take. The attorney said that we would be in bankruptcy, not our daughter and she can do whatever she wants, and since she has the money to buy it, there would not be a problem. I asked him if it would be ok to have her give us a 1099 at the end of the year, and he said that was fine.

He said not to even mention the money that my brother owes me! As long as it is not given to me by check or anything, which it is not, who else besides me needs to know?! BTW, my brother has been paying me cash, which I have not deposited in the bank, so there is no trace of it. Also, since we wouldn't be filing until next year anyways, on the slimmer than slim chance that the money that my brother owes me came up, it could easily be explained as our using it for living expenses, which isn't far fetched. He said it's only $7k that my brother owes me, not $70k, so it's not a problem anyways.

Please note that only the circumstances of titling and explaining the trailer have changed throughout the course of these posts, NOT the intent to own it in fact if not in registration ("silent partner"). While the third post says that her daughter will be buying it herself "in her own name", every other statement in all of her posts make it clear that Liz intends to retain actual ownership of the asset, and that while the daughter may use her own funds for the actual purchase, this will later be repaid with the money from the brother that she now says the atty has directly and openly advised her not to disclose. Also note, especially in Liz's third post, the overt intent to conceal: "in our daughter's name;" "give us a 1099" (to create the appearance of an actual employee relationship as opposed to the "silent partnership"); "he said not to even mention;" "who else besides me needs to know;" "there is no trace of it;" "it could easily be explained;" "isn't far fetched;" "it's only $7k... so it's not a problem."

So I thought about it, and instead of getting back on my soapbox, I'd like to point out just a few of the places on the bk filing our Liz will have to either directly conceal by omission, or flat-out lie, about both the trailer and the loan repayment if she were to file today. These are not every possible place, just the handful of absolutely blatant points where Liz will have to lie:

Form 6, Schedule B: Personal Property (12/07):

1. Cash on hand. <--- This is where the "untraceable" cash from the loan payoff is supposed to be disclosed; to refrain from mentioning the "untraceable" cash here is a direct omission of specifically requested information and -- to me, at least -- constitutes the act of concealing assets in a bk filing. I'm not an atty, I could be wrong, but there it is.

16. Accounts receivable. <--- This is another way to say, "Money owed me", i.e. the unpaid balance of the loan.

18. Other liquidated debts owed to debtor including tax refunds. Give particulars. <--- It's here if the brother has the money and is just waiting to pay her.

21. Other contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims. Give estimated value of each. <--- Brother's debt could also be here.

23. Licenses, franchises, and other general intangibles. Give particulars. <--- If the daughter purchases this concession stand trailer (even if with her own money) then Liz's use and control of it could very well have a value in the trustee's eyes, since it was purchased for the express purpose of Liz using it exclusively for the purpose of making a profit.


Form 7, Statement of Financial Affairs (12/07):

10a. Other transfers: List all other property, other than property transferred in the ordinary course of the business or financial affairs of the debtor, transferred either absolutely or as security within two years immediately preceding the commencement of this case. <--- a) This is where she would have to declare the transfer of the trailer to her daughter's name, if her daughter does not purchase it with her own money. b) If the daughter uses the brother's payback to buy the trailer, then the loan repayment itself would have to be declared here. Just because it hasn't been paid back doesn't mean it doesn't exist: she is transferring her right to repayment to the daughter in return for buying and titling the trailer in the daughter's name.

14. Property held for another person: List all property owned by another person that the debtor holds or controls. <--- The trailer would have to be listed here, under any of the proposed scenarios.

It should also be noted that BOTH the schedules and the Statement of Financial Affairs EACH contain an explicit declaration to be signed under penalty of perjury that Liz will have to openly put her name to and declare true:

Form 6, Schedules (12/07):

DECLARATION UNDER PENALTY OF PERJURY BY INDIVIDUAL DEBTOR
I declare under penalty of perjury that I have read the foregoing summary and schedules, consisting of _____ sheets, and that they are true and correct to the best of my knowledge, information, and belief.

Form 7, Statement of Financial Affairs (12/07):

I declare under penalty of perjury that I have read the answers contained in the foregoing statement of financial affairs and any attachments thereto and that they are true and correct.

When you look at the forms, it's pretty clear that Liz will either have to come clean, or directly LIE in multiple places to conceal both the trailer and the loan repayment, and that she will have to do so under penalty of perjury.

This is what she says the atty advised her to do, and moreover, what she herself thinks is a really good idea.

*sigh*

[Priceless ProSe]

Thank you again freshlikeadaisy, you give me someone to model myself after (keep your cool even when upset). And I agree that the OP knows what she is doing, at first I thought she might be confused but it is fairly obvious now (especially after reading the other threads).

First she said she had "investment" properties in FL, then she claimed she was just moving from FL to GA (although she has owned a house in GA for years) because she want to claim FL exemptions, then she found out she couldnt claim FL exemptions so shes from GA again (I assume on this last one based on avatar). And I saw how helpful you were to her in that thread as well, so you sure have the right to be PO'd because she was using you to test if she would be able to get away with the whole "I live in GA, but I dont" deal.

[JRScott]

Good Luck Liz

However I'd see 2-3 more lawyers before deciding course .

[Liz]

You know I wrote a long response to all of your b.s. comments, but then then decided to delete it. Instead:

First of all, I am not trying to defraud the bk system. I am simply trying to do what I can to salvage my livlihood after losing close to $200k in deposits and payments in real estate investments that went to hell, not to mention all the credit card debt that I have. I am not going to "sell off the trailer" to pay creditors. That would be ridiculous because it will be my primary means of income! What am I supposed to do, sell my ass on the corner for money instead? Or would I have to declare my ass as an asset that could possibly be sold off to pay creditors as well??? Freaking ridiculous!

And to Priceless re: your comments re: GA/FL exemptions....I initially thought I could take FL exemptions, based on what I had read, that 's what it seemed like, until I was shown/told differently. So what if I am trying to avail myself of the law so that it goes in my favor? Isn't that why anyone who files bk is able to file, because they are availing themselves of the law!? I live in GA and it is what it is. If I can take Federal exemptions instead based on my not having lived here for the past 2 years, and because I am in a "grey" area, then great, if I must take GA exemptions, then that is fine too!
I didn't come here to be crucified....if an attorney is telling me that I can do so and so, and that it would be ok because I AM NOT filing tomorrow, or next week or next month, then who the hell are you guys to say differently? I forgot, you all must have law degrees right???!!! Or maybe you are just jealous that you didn't have a savvy attorney to tell you what to do to salvage more of your things. So in closing.....f^ck you all for your comments and your ill wishes!!!

[debtrelief08]

What i will say is that i spoke to a lawyer based on the suggestions of people on this board because i was the executive on an estate for my son and i was in bankrupcty I filed pro se and i was scared. When i went to speak with the lawyer he exsplicitly told me that it was not an issue and not to amend my schedules and there was a settlement that my son received from a lawsuit and i was the personal representative.
I am just posting that there are lawyers that really attempt to help client keep assets

But i do not want people to think that i was intentally trying to defraud but i found this site after i filed and i asked and was told to see a lawyer about my situation and the lawyer said to not worry about it. And i am now 65 days from my 341 and have received the order in no asset case and i kept my stimulus taxes and anything else other than the Hyundai that they have yet to pick up (but i sent the intent to surrender)

So i was just saying that there are lawyers out there and in my case it was too late for me i was scared to draw attention to the situation by amending and the lawyer told me not to...

so what do you do when you have an officer of the court TELLING you if you don't you can keep it.

I do not think it is right to come down on her because a lawyer is advising her and not to mention if she does what he said she will more likely than not get away with it. I know it is a moral issue but it is hard to tell someone to give up something they know good and well they could keep.

IMHO

edited because i needed to correct the grammatical errors it was horrible i could not even understand what i meant LOL

[lrprn]

Well I can see that the hot summer temperatures are not bringing out the best in everyone lately

What we have here is an honest disagreement. Not the first time this will happen in the forum and not the last. HOWEVER, accusing someone of bk fraud when she is following a bk lawyer's advice is beyond this forum's stated purposes.

We are not and never have been bk lawyers here. Stating an OPINION as a bald fact that someone is committing bk fraud is not appropriate here and confuses our newer members who are just learning about bankruptcy.

If pre-planning a bk and trying to LEGALLY preserve whatever we can after filing is fraud, then most of us here are guilty as charged. What Liz has proposed is bk pre-planning much like being given permission to drive a family member's newly purchased car before filing. The car isn't the filers so it isn't the filer's asset and isn't listed as an asset for the filing.

It's NOT illegal for Liz's relative to purchase the trailer and be responsible for the loan then allow her to use the trailer - the reasons her attorney gave her are legal reality This situation does NOT meet the legal definition of bk fraud. (For that definition, see http://topics.law.cornell.edu/wex/bankruptcy_fraud )

Liz would be committing bk fraud ONLY if she originally owned the trailer and then transferred the title to her relative before filing or she pretended the relative owned the trailer when Liz really was financially responsible for it. Neither of these situations are going to happen in this case as Liz has described it.

Everyone, let's be careful where we throw rocks given our own glass houses.

[FreshLikeADaisy]

What i will say is that i spoke to a lawyer based on the suggestions of people on this board because i was the executive on an estate for my son and i was in bankrupcty I filed pro se and i was scared. When i went to speak with the lawyer he exsplicitly told me that it was not an issue and not to amend my schedules and there was a settlement that my son received from a lawsuit and i was the personal representative.
I am just posting that there are lawyers that really attempt to help client keep assets

But i do not want people to think that i was intentally trying to defraud but i found this site after i filed and i asked and was told to see a lawyer about my situation and the lawyer said to not worry about it. And i am now 65 days from my 341 and have received the order in no asset case and i kept my stimulus taxes and anything else other than the Hyundai that they have yet to pick up (but i sent the intent to surrender)

So i was just saying that there are lawyers out there and in my case it was too late for me i was scared to draw attention to the situation by amending and the lawyer told me not to...

so what do you do when you have an officer of the court TELLING you if you don't you can keep it.

I do not think it is right to come down on her because a lawyer is advising her and not to mention if she does what he said she will more likely than not get away with it. I know it is a moral issue but it is hard to tell someone to give up something they know good and well they could keep.

IMHO

edited because i needed to correct the grammatical errors it was horrible i could not even understand what i meant LOL

Debtrelief, I appreciate your point, but you didn't have to lie anywhere from the sound of things, either in your filing or in your 341, to successfully navigate your Ch7 bk, regardless of the background circumstances.

This is the essence of my point: there is nothing wrong with planning, or strategizing before and during your bk. In fact, it is very much in your best interest to do so: there is absolutely nothing morally or legally wrong with planning your bk so that you can keep the maximum allowed you by bk law.

BUT...

There is EVERYTHING wrong with having to lie, and omit explicitly requested facts, in order to qualify for and receive a bk discharge, regardless of the chapter.

You don't have to be a lawyer to know when you're lying.

Lrprn, I appreciate your comments, as always, and if you say it's time to stop then I will gladly comply. While I must disagree with much of what you said -- to me it is an honesty issue, far more than a "quality of legal advice" issue -- the fact is that I've had my say, Liz has had her say, and so we're very likely all said out.

[Priceless ProSe]

Well I can see that the hot summer temperatures are not bringing out the best in everyone lately

What we have here is an honest disagreement. Not the first time this will happen in the forum and not the last. HOWEVER, accusing someone of bk fraud when she is following a bk lawyer's advice is beyond this forum's stated purposes.

We are not and never have been bk lawyers here. Stating an OPINION as a bald fact that someone is committing bk fraud is not appropriate here and confuses our newer members who are just learning about bankruptcy.

If pre-planning a bk and trying to LEGALLY preserve whatever we can after filing is fraud, then most of us here are guilty as charged. What Liz has proposed is bk pre-planning much like being given permission to drive a family member's newly purchased car before filing. The car isn't the filers so it isn't the filer's asset and isn't listed as an asset for the filing.

It's NOT illegal for Liz's relative to purchase the trailer and be responsible for the loan then allow her to use the trailer - the reasons her attorney gave her are legal reality This situation does NOT meet the legal definition of bk fraud. (For that definition, see http://topics.law.cornell.edu/wex/bankruptcy_fraud )

Liz would be committing bk fraud ONLY if she originally owned the trailer and then transferred the title to her relative before filing or she pretended the relative owned the trailer when Liz really was financially responsible for it. Neither of these situations are going to happen in this case as Liz has described it.

Everyone, let's be careful where we throw rocks given our own glass houses.

Fair enough. I think I use the word "fraud" beyond the legal (BK) definition and this is something that I will try not to do in the future. I do think you misunderstand her intent as she expressly stated the money for the trailer was money owed to her by her brother. The daughter came into the story as a convenience.

Also, she clearly stated that it was her intent to conceal the fact that her brother owed/paid her money, because no one would find out as there is no paper trail. Perhaps she does not know that this is perjury, but based on the information presented to her in this thread it would be prudent for her to at least contact a few other attorneys to see if her attorney was asking her to commit perjury. I was under the assumption that the average person would know it was wrong to falsify documents they were submittng to the federal BK court regardless of what thier lawyer advised them (and maybe even moreso if ur lawyer advises you).

Debtrelief08: I feel where you are coming from, we all want to keep our things if we can. I think fresh summed it up very well, its a matter of morals, and actions such as this cause alot of problems for everyone in the long run. And even if it doesnt bother you morally you would have to ask yourself if it is worth it if by some chance you were caught (not apprehended mind you). I think thats a great question, "would you lie to the court to keep your things?" very tempting, but then again so is looting in times of emergency/disaster. I hope you find a way to keep your things and your morals (intact), im sure you do too.

I apologize to any members/future members if my comments are disheartening. I promise in the future that I will not use harsh or accusatory words/statements, even if it is blatantly obvious as to the persons motives/actions. Feel free to call me out on this if I ever break this promise.

I dont think it is expressly "wrong" to get on peoples cases when they are suggesting the types of things she was suggesting, because it may bring some sense to the person and save them alot of grief in the future (as opposed to just trying to make someone feel bad). This being said, I wont be the one doing it in the future. I think if you read the entire thread you will see a progression from helpfullness/suggestion, to warning, to stern suggestions/warnings, to disgust.

Im done!, feel free to go at me as im a message board pacifist as of today.

[MajorMike]

I agree!! Liz's daughter isn't buying that stand for her own personal use and gain, she is doing it to hide assets FOR Liz.....that is fraud, IRPRN!

[TEW]

Hey Liz
I am so happy that you have a family that is going to support you in the stressful time.
I am happy you have a plan for post BK other then seeing how many new CCs you can open after BK.
Good luck with you concession trailer. I have often thought about those French fry trailers you see at the fairs and such and thought about turning a bag of potatoes into a thousand dollars.
Good luck

[justplaintired]

Good luck Liz!


Personally I am not going to throw any stones. We planned our BK. We put time between purchases. Sure we needed to file sooner, but we didn't want to get in trouble because of luxury purchases, yes we did a stupid thing and bought a $800 tv, we didn't intend to file BK at that time, but ended up not having much choice shortly there after cause of an increase in interest rate. We wanted our income to keep us below median income. We wanted to use our stimulus so we waited for it. We purchased a fridge, ours died, so we got a small loan from DH employer($250) paid back over a 2 month period so once again we waited. We did lots of things to plan our BK and I don't apologize for that, because from my reading on this forum so did well over half of the members. Does that mean we are all committing fraud? Personally if her attorney is advising her, then surely he knows BK laws as well if not better then lots of us on here. Sorry I hope I don't offend, because I by far am no expert, I just have spend alot of time on this forum and I feel this women is simply trying to find a way to make a living after the collapse of her livelihood.