WEIRD SITUATION need Help, TT trying to recover 14k from another party..

[JRScott]

One thing that I have not been able to find any information on is the following scenario, based on your example:

If your MIL had paid your FIL's credit card (creditor), would this be considered an insider payment or a payment to a creditor?

The law cannot be stupid enough to have a 90 day look-back for your MIL paying her creditors (even with debt) but a 1 year look-back for her paying a spouse's creditor right?

If she had paid the money directly to the creditor it would not be an issue since the FIL never would have touched the money.

[Dewey]

This is sort of the situation I'm in, but on the other end. I'm the creditor that was defrauded.

My husband's brother and wife decided they wanted access to our credit four years ago. They applied for a $100,000 line of credit jointly in their name and my husband's name (without his knowledge or consent). Identity theft and fraud....they also lied about my husband's annual income and checking account balance on the application. It was inflated by about 10 times!!! Additionally, the application asks if you are a current customer. We actually were with our mortgage at the time, but obviously the in-laws didn't know that and answered "No." Obviously I think the bank should have gone to some effort to verify ANY of this information before opening this line of credit.

The in-laws paid on it up until last fall, when of course--the bank contacted my husband. Of course it was the first we'd heard about it. Long story--it is NOT on my husband's credit report.

The bank was able to extort a significant portion out of my husband with threats against our house. He hid all of this from me....as he demanded his relatives to repay it.

Of course they weren't going to and knew they could manipulate my husband.

So I find out a couple months later and promptly file a police report and get an attorney. We were going to sue them or they could willing sign a Promissory Note Secured by a Deed of Trust against their house (which still had enough equity at the time). They signed.....and then promptly filed a Chapter 7 pro se less than 2 months later.

When we got notice of their bankruptcy, I went down to the courthouse and printed the schedules. All sorts of assets not declared that we obviously have first-hand knowledge about! I promptly contacted the TT and the UST and then filed an AP, challenging the discharge of our debt which arose out of fraud as well as their entire discharge.

The 341 went horribly bad for them. They amended one schedule and claimed verbatim what we had in the AP.

We have a trial date and are currently in discovery.

They're not discharged and the TT just filed a notice of assets for the creditors, where they had previously been a no-asset case.

I've been waiting and wondering if any criminal charges will actually happen.

In the meantime, we've been concerned about the insider preferential payment look-back and the TT suing us. Although, since it just happened last fall--they've paid us less than $2,000....maybe that's not enough to be worth their while?

I am amused by the preferential payment to an insider. I realize we are considered insiders, but in this situation--nothing is further from the truth. They were and have been going out of their way to NOT pay us. They freely admitted that they felt they needed to pay their "real creditors" instead.

[hereforinfo]

Found the case. Search for Honarvar and Zamanian in google. I pulled all of the Ch 7 and court documents from pacer too as I found the case fascinating. However, I was shocked to see that this couple was jailed for fraud when cc companies do little to nothing to verify cc applications. Furthermore, many of the applications I receive in the mail ask for a minimal amount of personal details. Their lives are ruined yet the cc companies walk away with not even a slap on the wrist or even a warning. They sure can call you 20 times a week when you're late but cannot make one phone call to verify your details and simply ensure you understood an application.

Well, technically the bank is being punished by not being paid back. However, we all know they just pass the cost on to the rest of us consumers, investors, and taxpayers.

Debt that was obtained by "fraud" or dishonesty (which includes overstating your income on applications) can be non-dischargable. However, in order for that to happen a bank would have to pursue it, and I think it's very rare that they do that. It would be too time consuming and costly on their part to dig up old credit applications from every person filing bankruptcy and then research to find out if the stated income was legit at the time. Then they'd have to spend thousands in legal fees, all to try and collect a debt that is most likely not even collectible. It's not worth their time or money. If I were you, I wouldn't waste another second worrying about it.

As for those stated income loans, I think they should require those borrowers who are seeking a mortgage modification to submit proof of their income at the time the "no doc" loan was originated, in order to be approved. Then they could weed out the people who lied in the first place. But those who were honest could get a fair deal.

[justbroke]

This is sort of the situation I'm in, but on the other end. I'm the creditor that was defrauded.

Wow. With family like that... who needs enemies or who even needs identity theft protection!

[OhioFiler]

Wow. With family like that... who needs enemies or who even needs identity theft protection!

I would be surprised if the brother-in-law's and his evil wife's bk are not dismissed if in fact the story as explained above is true. The hidden assets should be enough.

[Dewey]

I would be surprised if the brother-in-law's and his evil wife's bk are not dismissed if in fact the story as explained above is true. The hidden assets should be enough.

We shall see....but I'm not very optimistic. I've been told that our jurisdiction is pretty darn lenient on fraud.

The in-laws are begging to settle at this point. I'm not sure what would happen to the 727(a) objections if the 523(a) objection is essentially settled. I suppose it's possible that the court could still dismiss with prejudice on its own from what its seen thus far.

There is much more other than the hidden assets that the court has seen first-hand. There was perjury at the 341--they claimed no one owed them any money and they didn't have a claim against anyone. Then they filed in their answer that my husband owed them over $18,000 for some non-existent contract (which of course, they can't produce) If that was actually true or they believed it to be true, then they would have needed to put that in their schedule as well, but didn't.

There was also a false oath when they certified they mailed a Motion to Avoid Lien to us and our attorney, when in fact they didn't. It seemed they were attempting to get a default judgement since we wouldn't be able to file an objection if we weren't notified of the Motion. I discovered the Motion to Avoid Lien in the docket on day 11 of the 15 day deadline to object. Once we timely filed the objection on the deadline and notified the court of that stunt--suddenly a replacement Motion to Avoid Lien was filed and received by us and our attorney. They're trying to claim it was just a "pro se" mistake.

So yes, I don't need enemies when I've got family by marriage like this.

[shabam]

I am amused by the preferential payment to an insider. I realize we are considered insiders, but in this situation--nothing is further from the truth. They were and have been going out of their way to NOT pay us. They freely admitted that they felt they needed to pay their "real creditors" instead.

You will not have an issue. Not with that amount. The case you described is a clear cut fraud charge. Using the ID of someone else to obtain money is a criminal offense.

[Chowder]

Not to mention some pretty obvious civil damages.

[Dewey]

Not to mention some pretty obvious civil damages.

When I filed the police report, they basically said the county attorney wouldn't be likely to pursue it criminally. They said it is pretty common for the county attorney to recommend pursuing family fraud in civil court instead.

Of course there is still the chance that the UST will make a criminal referral, but I'm not holding my breath from what I've heard about our jurisdiction.

This is a large, federally insured financial institution we're talking about. So all that false information on the application....and identify theft should earn them a criminal referral.

I provided a copy of the police report to the TT, UST, and court which I made 5 months before they even filed for bankruptcy.

Makes you wonder why they would even consider filing bankruptcy pro se with this huge, nasty, can of worms just itching to open up all over the place?

[Dewey]

You will not have an issue. Not with that amount. The case you described is a clear cut fraud charge. Using the ID of someone else to obtain money is a criminal offense.

You mean with the TT attempting to avoid the $1800 in payments we got in the last year?

[shabam]

You mean with the TT attempting to avoid the $1800 in payments we got in the last year?

Yeah, I don't think that amount would be worth their time.

[shabam]

When I filed the police report, they basically said the county attorney wouldn't be likely to pursue it criminally. They said it is pretty common for the county attorney to recommend pursuing family fraud in civil court instead.

Of course there is still the chance that the UST will make a criminal referral, but I'm not holding my breath from what I've heard about our jurisdiction.

This is a large, federally insured financial institution we're talking about. So all that false information on the application....and identify theft should earn them a criminal referral.

I provided a copy of the police report to the TT, UST, and court which I made 5 months before they even filed for bankruptcy.

Makes you wonder why they would even consider filing bankruptcy pro se with this huge, nasty, can of worms just itching to open up all over the place?

Much like the case I posted earlier, the UST would refer it to the FBI for prosecution. Was the bank they made the application to based out of a different state? I understand they are family and know it's a hard situation but they should have realized the ramifications of such a large crime. It's one thing if it was $1K but $100k in credit under your husbands name is a total breach of trust.

[Dewey]

Much like the case I posted earlier, the UST would refer it to the FBI for prosecution. Was the bank they made the application to based out of a different state? I understand they are family and know it's a hard situation but they should have realized the ramifications of such a large crime. It's one thing if it was $1K but $100k in credit under your husbands name is a total breach of trust.

The bank is one of the largest national banks.

Yes, they should have realized the ramifications. I think they thought they'd be able to get away with it. It's not like they NEEDED the money, either...like they were desperate and felt this was a matter of survival.

According to the statement of the account, this was greed, pure and simple. All the itemization of the cash for their numerous vacations, amusement park season passes, restaurants, shopping sprees, etc. is right there in black and white.

[Dewey]

Yeah, I don't think that amount would be worth their time.

It was strange that they also denied making any of the defined "insider" or "preferential" payments to us on their schedule or in the 341. It's not like they were trying to protect us, either--given our very hostile relationship.

I really hope the TT doesn't come after us for the measly $1800. Hey, I alerted them to hidden assets....and turned a no asset case into an asset case. I just hope that one of those assets isn't what the TT is expecting to avoid from us.

[Chowder]

The bank is one of the largest national banks.

Let me guess... The bank has done nothing.