Lying about income on applications?

[ansky0007]

Spoke with a layer today about filing my CH7 and all looked good until he asked me if I lied on any of my applications for credit? I did lie since I needed money and while I was only making $20k a year from my business when I started it and I listed $100k. He said it might be a problem since my debt is so high and could cause a possible suit against me. Anyone else lie about there income on applications?

[magyar123]

Did you misrepresent (lying is such a nasty word) your income on loan applications or credit card applications? Both?

[epiphany]

Spoke with a layer today about filing my CH7 and all looked good until he asked me if I lied on any of my applications for credit? I did lie since I needed money and while I was only making $20k a year from my business when I started it and I listed $100k. He said it might be a problem since my debt is so high and could cause a possible suit against me. Anyone else lie about there income on applications?

Well, um, yeah , but definitely not to that extent. I mentioned at the first consultation with my lawyer that I was worried about that and he told me that if a creditor were to bring that up, the judge would most likely rip them up one side and down the other for not verifying the income.

I didn't worry about it from then on.

Your lawyer is being cautionary as he should be. Try not to worry about it and deal with it if and when it happens, which seems unlikely, especially if there is nothing to come after.
ep

[lrprn]

ansky, there are multiple posts and whole threads about lying on cc apps and how that can affect filing scattered in the forums. Do a search to unearth them.

However, the bottom line is that it all depends on the creditor and if they think they can profit more from you by taking you to court over the inflated income rather than just letting it go. In most cases, especially if you don't have anything worth taking, most creditors won't want to go through the expense of taking you to court to prove you took their money fraudulently.

It's harder to prove fraud than you think since most creditors have very poor record-keeping and won't be able to produce your original application. Without it, they have no case.

Follow your lawyer's advice in this situation, and be sure you thoroughly understand why he/she is advising what they are and what all your options are.

[ansky0007]

Yeah, He did not seem to concerned with it but wanted to put everything out on the table which I appreciated. We are getting ready to file in 70 days and just getting everything in order. I am going out on amex with a total of $190k so I am sure Amex will look at every option.

For 2 years as my debt has been climbing Amex has been asking me for business financials and I never sent any and they kept extending me credit based on my credit score and payment history. Lawyer did say that Amex can try to sue me but my business has failed and I have nothing left so what are they going to take. Only concern however is costs to ratain the lawyer if they do take action since it can be very costly and would not be covered under my bk retainer.

[HHM]

Objections based on misrepresented income are rare, (I am talking dodo bird rare...fyi, the dodo bird is extinct). Ususally, if the creditor is going to object, they will do so on more solid grounds, and then throw in the misrepresented income.

[Cali]

I am very surprised Amex didn't verify your income or do a Financial Review.

[justbroke]

Amex pulled the financial review on me once. They had suspended my platinum Amex charge cards (business and personal). I had to send in the form for an IRS Transcript (4506?).

Anyhow, they liked what they saw and extended even more credit (even on my revolving lines). What I owe Amex today is most of my unsecured debt (> 50% and almost 6 figures). I used the cute little Blue Card to pay property taxes (which was over 5 figures itself), and support myself for months.

I saw the writing on the wall, but never really resigned myself to what I should do. I knew I couldn't file Chapter 7. I didn't know the power of Bankruptcy... never heard of Chapter 13, and was literally just drowning in debt.

Ahh, but enough about me.

As HHM has pointed out, some Bank in California tried to pull the "debtor lied on mortgage application", and the Court just laughed. At the time, many folks had been using the "No Documentation. No Income Verification" loans. The Bank had a fiduciary responsibility to verify the income. If it chose not to verify the income and documentation, then that was the Bank's fault! Even if the Bank hadn't verified the income, it could have checked the Credit Report and came up with some basis of a Debt-To-Income ratio or guessed at the income level of the applicant.

I have no sympathy for Banks that now cry that someone misrepresented information on their NO DOC / NO INCOME loans!

[ansky0007]

I guess they saw the writing on the wall because they have been leaving me messages monthly that they wanted business financials. I never sent them anything and they never cut me off. I was rotating money back and forth for months so the payments were always on time yet I owed more and more each month until it finally reached a boiling point where it was impossible to pay it back on time.

[Flamingo]

Spoke with a layer today about filing my CH7 and all looked good until he asked me if I lied on any of my applications for credit? I did lie since I needed money and while I was only making $20k a year from my business when I started it and I listed $100k. He said it might be a problem since my debt is so high and could cause a possible suit against me. Anyone else lie about there income on applications?

In legal terms, you obtained credit under fraudulent circumstances. You already know that so there should have been no surprise when this came to light and became reality on the table. Yes it is the creditor's obligation to check all that out but for some reason, they did not. If you read all the fine print when you signed the credit application, you will find their rights stated on there if you provide fraudulent information. You basically signed that all information provided was true and correct. You could compare this with someone lying on their resume to get a job, stating they went to such and such University. If that someone is hired and the employer eventually finds out the applicant lied on the application, they can fire that person. The big thing is the risk you take in lying and whether or not something will come up to reveal the fraud. Kinda hard to live with that knowledge and risk knowing someday it could be revealed. Now that you see what can come out lying on applications and all the worry and questions involved, learn from this and protect yourself in the future. If you don't make the money to qualify for the credit, you can't afford the credit.

[Stilltheone]

ansky, there are multiple posts and whole threads about lying on cc apps and how that can affect filing scattered in the forums. Do a search to unearth them.

However, the bottom line is that it all depends on the creditor and if they think they can profit more from you by taking you to court over the inflated income rather than just letting it go. In most cases, especially if you don't have anything worth taking, most creditors won't want to go through the expense of taking you to court to prove you took their money fraudulently.

It's harder to prove fraud than you think since most creditors have very poor record-keeping and won't be able to produce your original application. Without it, they have no case.

Follow your lawyer's advice in this situation, and be sure you thoroughly understand why he/she is advising what they are and what all your options are.

EXACTLY!

We "fluffed up" our income on applications and no one ever said anything to us about it.

[0007ouch]

End Result ?

So what happened ??

[DYLAN150]

I always filled out the applications (visa cards) via the internet and may have rounded the dollar amounts off alittle maybe 2k or so. I guess if its a buck or more than you could consider that as lieing. Do you think the credit card companies keep applications that go back 10 years? So yes, I am gulity of that also. Some applications I remember rounding off by a thousand bucks. I always wondered if they showed up in court with the application in hand.

[magyar123]

Most credit card applications only ask for the sole applicant's income information, but not the source of the otal household income - if it's higher.
Example: John applies for the card in his name only, but is married to Mary. John is making $25,000 a year - which he puts in his income information area.
Mary is also earning $25,000 a year.
So - in the total household income area John writes $50,000. Because that's what it is. This is not fraud or misrepresentation.

[Dst1]

I type all this up and just now realize this is an outdated thread....sorry....so yeah, what happened? Or maybe he's in the clink?