Blatant bankruptcy fraud

[Dewey]

So, I'm a creditor--but not by choice.

A close relative perpetrated some major credit card fraud on us. We filed a police report, but ended up out of significant money in order to preserve our credit. Rather than be sued by us when we discovered it, they voluntarily signed a Promissory Note/Deed of Trust against their house.

Then they filed Chapter 7 only 59 days later.

So, of course they are forcing us to challenge the dischargeability of our debt as well as their entire discharge due to even more fraud and attempted fraud on the Court that we, as relatives have direct knowledge.

I filed the Adversary Complaint and sent copies to their case trustee and the U.S. Trustee, after I spoke with their office. They stated they are sending down the U.S. Trustee for their 341 Meeting.

But I've found even more fraud.

These original debtors have yet another relative living with them that they claimed as a dependent. Well, we just discovered that this "dependent" has his own Chapter 7 petition going that was filed a few days before theirs! This person's 341 meeting is the same day and has the same trustee and judge. This relative also has all sorts of blatant false oaths and claims on his petition that we and other family members can easily prove.

I'm just curious about what the ramifications are if all these debtors walk into their 341 meeting with a U.S. Trustee and their own trustee ready? We are half suspicous that they will flee and not show up to the meeting.

[TEW]

Why would they flee. don't waste your time going to the meeting. Or bothering the trustee's. Filing an AP is only flushing more of your money down the drain.

[justbroke]

I don't know if it's flushing any more money. It depends on how much money there is. If there is a recorded lien against the property, and it has some priority... the money could be recoverable. Also, fraudsters get away with things because no one ever challenges them. Bankruptcy Fraud is a crime and I would probably do the same as Dewey. It's emotional, I'm sure, as these are relatives who are trying to pull one over on Dewey.

If they do show up at the 341 Meeting, then they will have to answer questions under oath. If Dewey and his attorney (if represented) went to the 341 Meeting, they could get some early things on record with the Trustee (and perhaps the U.S. Trustee him/herself) as well.

If you have the money to contest dischargeability, and it's of a significant amount (we don't know) I would recommend doing it every time. Dewey is not a debtor in this case.

[Dewey]

Yes, $250 for the AP is unfortunately a drop in the bucket compared to what we are owed. It is tens of thousands of dollars.

FYI, they filed pro se. Therefore, I am pro se.

There is a recorded lien, but it will soon be worth nothing.

They stated in their schedules that they intended to reaffirm the house and moved to avoid our lien, which is another part of the fraud. They certified under oath that they mailed a copy of the Motion to us and to our attorney trustee back in April. They obviously didn't since we didn't discover the Motion until early May when we got the Notice of Bankruptcy and went down to the courthouse to inspect the docket and found the Motion to Avoid Lien incidentally. We had 15 days to respond or they could get the default order. We found it on day 12.

We filed our Objection and Request for Hearing on the matter on Day 15. It got back to them through the good ole family grapevine that we had found the motion in the docket, knew what they tried to pull, and were going to notify the Court of the false oath. They must have freaked, because they quickly ran down and filed a REPLACEMENT Motion to Avoid Lien two days later. I think that "the preponderance of the evidence" will look really bad to the Court.

Anyway, back to our worthless lien--apparently since they are pro se and REALLY don't know what they are doing--they must have believed the commercials about "Keep your house, keep your cars, etc." but MISSED the part about "You still have to PAY for them in order to keep them!"

They haven't paid their mortgage in 4 months. The senior trust deed immediately filed a Motion for Relief from Stay. Tomorrow is the deadline for their response. You know what their response apparently was? They filed a Motion to Avoid Lien on the Mortgage company! We heard that they think the house is protected!

The mortgage company claimed in their Motion that in addition to the lack of payments in 4 months, before, during, and after filing--that the house is worth less than what is owed to them.

So I think it is imminent that the mortgage company will be allowed to foreclose and we'll be out our security.

Perhaps that is when they will realize they don't know what they got themselves into.