The importance of disclosing ALL assets in Bankruptcy

[HHM]

There were stats quoted (sources also) in the years prior to the passing of the 1995 law which showed that over 50% of BK filings included fraud.

Umm, consider the source? If you actually go back, the only sources for those stats are the creditor advocacy groups, but every BK judge, trustees, attorneys, consumer group, etc, heavily disputes those claims.

I am not saying it didn't happen, nor am I saying it is not happening now, but the so-called fact that BK fraud was rampant is pretty much disputed by just about everyone who actually works in the BK field.

[Flamingo]

Well if the stats are true, it would lead one to believe the "fraud" they are referring to is an innocuous, less intentional variety, similar to many of the posters questions here. When most of us hear "fraud" we automatically think of situations like the Christina M. Leviskas story, which constitutes a very low percentage of BK filings both before and after "new law".

Many examples that were quoted at that time included transfers of property and assets to beat the clock as to the filing time period for those transfers, people maxing cards on purpose knowing they would soon get laid off then filing, and many other various incredible examples; and as I read that information I remember draining our savings and my husband's 401(k) to AVOID filing yet other people just don't care and just made it harder for those who legitimatly had to file. Fraud comes in many forms and in the years prior to the new law, creditors were aware of what was going on but could not do anything about it so they kept after getting the new law passed. Again, it makes all the good folks who need BK protection have a harder time when they need the benefits of filing BK due to all those who do it just because they can and get away with it.

[SUB]

Depends on which side of the fence you're on. Someone could just as easily claim you were bleeding off assets to avoid their distribution by a trustee. I'm sure there's no shortage of folks over at the credit card company think all BK filings are fraud.

I'd venture to say the revamping of BK rules had NOTHING to do with the quality of filings, and EVERYTHING to do with the inevitable busting of the housing/mortgage/credit bubble and the ensuing flood of BK filings.

[lrprn]

For those looking for bk statistics, here are a few eye-opening links to peruse -

US Ch 7 and Ch 13 Bankruptcies from 1985-2001 - http://www.usdoj.gov/ust/eo/public_a...s/abi82002.htm

Bankruptcy Statistics in US Courts - http://www.uscourts.gov/bnkrpctystat...ics.htm#fiscal

Personal Bankruptcy Stats by State (use Statistics area to find your state) - http://www.bankruptcyinformation.com/services.html

What they all show is an overall continued increase in personal consumer bankruptcy filings over the last 20 years. Of course, our population has been increasing as well, so what is needed is a stats 'guru' who can remove the population increase influence from the filing numbers to see what the corrected actual increase is.

In 2003, the FBI estimated that 10% of all consumer and business bk cases filed involved fraud (mostly hiding of assets) - http://bankruptcyfraud.typepad.com/O...USTPROGRAM.pdf . I wouldn't call that overwhelming at all. (By the way, this 2003 report gives an excellent overview of how the US Trustees Office investigates and prosecutes bankruptcy fraud - it's very long but well worth the read, especially if your case is one the US Trustees are looking at closely.)

[Flamingo]

The information I read from major sources and also the Newsweek or Time Article (could have been Business Week or something along those lines) was during the year prior to the enactment of the new law or sometime in earlier 2004. Probably because of the increase in filings during that period of time, especially just prior to the law enactment, fraud increased (as indicated in the articles) as many attempted to file to beat the clock. But the articles did state rampant fraud and abuse took place but maybe earlier stats in prior years just did not know how much. I had the information saved for a while but it's been long deleted since our discharge in 8/06. Didn't think we would need it or other info I saved anymore. I remember even seeing an article one time in Good Housekeeping on a family filing bankruptcy. Our attorney discussed with us in early 2002 the high evidence of fraud in filings because we questioned the detail involved in us having to provide one year's worth of bank statements and explanations as to credit card charges or cash advances for that period of time also. Credit card companies themselves made it easy for those with frauddulent intentions to run up high debt and file with the easy credit access previously available. Who knows the actual stats or what was discovered as fraud or what actually got through and not discovered. But there were many clever ways utilized to get approved for filing which are not now that easy.

[$$only4ever]

BK fraud was NOT rampant before the new law, that is just crap. Yes, some people abused the system (and still do), but to say BK fraud was rampant is just crap, and to punish the 95% of legitimate debtors because of the actions of just a few was misguided by congress. (democrats and republicans)

I don't know about anyone else that filed under the old law, but I can honestly speak for myself and say that I was totally honest with my filing and after reading several of the articles that was posted, I believe many other filers were just as honest as I was. I am sorry, but that was the big argument that the lobbyists for the banks used to change the law. "Whine, whine, all BK filers are cheating us."

How come we are not hearing the same garbage about Bear Stearns?

[Flamingo]

After seeing some of the questions asked on this forum as to how to get away with things (outright fraud), and some get very creative and a question as to fraud is posted almost daily, I wonder how rampant things actually were in past years and just not part of the reported stats at that time. I can imagine what went on in the past that cannot be gotten away with now. I don't think anyone will ever know because once filed and approved, no fraud is evident. Legit filers don't even think about anything like that or plan to file BK; something hits us that changes everything in our lives and BK is the only way out and we have nothing left to save anyway or we try to keep the house if we can afford it. Fraud filers plan way in advance to beat the system. Those are the ones that were to be targeted by the new law passage. I wish I'd saved the articles and info I had on those matters. But you never need it until after you toss it out!

I remember our attorney advising us of the impending law passage upon our initial visit in 2/02. It was delayed at that time and finally passed in 10/05. Our attorney said attorneys were not in favor of its passage and that it would be to our benefit to file in case it did pass (it was up for passage again later in 2002) because it would make filing much more difficult for us. In early 10/05 I had an interview at a firm closer to my home (was looking for a closer job at the time) and the attorney I interviewed with handled BKs and was in the midst of the onslaught of filings. He said he was getting out of handling BKs since they would involve more paperwork and time once the law passed, and he would have to largely increase fees. He said he was also tired of clients trying to get away with things prior to filing and he just told them he would not represent them. I did not take the job due to the salary offer and stayed with the firm I am still at presently.

There is fraud present in many dealings (Government Programs, Welfare, Medicare, Medicaid, health insurance, car insurance, etc., etc.). It all just makes it harder and more expensive for those that need the service or protection legitimately. We were too scared and emotionally wraught to even think about anything associated with the word "fraud" when we filed. We were just shocked when asked to provide a full year's of statements for our bank and list credit card charges/advances for a full year on all listed cards. It was due to those who have filed fraudulently in the past so everyone is suspect.

[Kentucky-BK]

I'm sorry, but that entire post just sounds like an ad to me, and pointless: everyone who has ever looked at the forms or spoken to an attorney knows good and damn well that assets are to be disclosed: no sermons necessary.

People who are going to lie are going to lie anyway; most people don't. Anyone who has read even a cursory number of posts on this board knows the general stress and worry level of the average filer, and the obvious sincere desire to do whatever is necessary (and surrender whatever is necessary!) to get their debts taken care of. The average filer -- at least on THIS board -- has been through hell and back already, and needs no finger wagging or pseudo-"legal" admonitions to be honest in their schedules. It's hard enough just being accurate, never mind trying to craft a slick lie about what is owned and where it might be hidden. For those of us who sweated blood to get our filings perfectly accurate, and lost many nights of sleep worrying over the finest detail in our schedules, this post is just absolutely offensive.

(And BTW, where are the trustees in this little sermon? Are they disabled or impotent somehow?)

I don't know what the OP was getting at, but it left a bad taste in my mouth and I would just as soon not see anything like it again. I don't usually get an instant resentment toward something I read, but as far as I'm concerned this poster can pack up his self-righteous bs and leave right now. This got my hackles up.

In re-reading my post, it could be perceived as somewhat smug. That was not my intent. If I make a mistake, I would always perfer for it to be in the nature of overemphasizing full disclosure.
Like you, I have had personal experiance with BK and lost sleep worrying about a bankruptcy case. I am not here to judge anyone.

[FreshLikeADaisy]

Kentucky, I was more than a little unnecessarily harsh and kneejerk in what I wrote. Please accept my apologies; I can see now that you really were trying to be helpful. Sorry.