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  1. #1
    Join Date
    Mar 2007
    Posts
    4

    Default Fraud By Bankrupty Individual To Avoid Paying Judgment Debt

    Here's a question concerning a creditor. Some of the facts have been simplified, but the basic guts are here:

    A friend borrows money, and does not repay. I file a lawsuit in civil court to recover. The friend files Chapter 7, no assets. In listing creditors, I am listed as a creditor, but the wrong address for me is intentionally used for the Notice to Creditor, I never receive notice, and I do not find out about the bankruptcy until after it is discharged. Part of the lawsuit included a claim by me that the friend had forged a check for $2000 and cashed it.

    Questions:
    1) Can an attorney get my debt removed from the bankruptcy on the fact the friend intentionally provided a false address, such that I could not participate in the proceedings as a creditor? Will this take a motion, or will an adversary filing be required?
    2) The investigation into the forged check is ongoing. What would be the impact if the friend is convicted of forging the check with regards to having the debt discharged?
    3) This was the FOURTH (yes 1+1+1+1 = 4) bankruptcy filed by this person, and the majority was consumer debt; no medical or "necessities of life" debts were listed. If an adversary proceeding is required, can this be brought forth for consideration by the judge, and what potential impact would this have?
    4) What if the debtor provided a signed statement indicating that he borrowed the money without any intention of paying it back? Does that constitute fraud?

    Before you ask, I am not trying to recover blood from a rock (Chpt 7 no assets). However, I know that this "friend" will receive an inheirantance in the next few years, and that is why I am trying to get the debt out from the discharge, such that I can persue other legal options to recover at that time.

    Opinions? Questions?

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Here's a good one for you......

    Quote Quoting lewist57
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    Part of the lawsuit included a claim by me that the friend had forged a check for $2000 and cashed it.
    What does that have to do with the debt to you?
    Quote Quoting lewist57
    What if the debtor provided a signed statement indicating that he borrowed the money without any intention of paying it back?
    Why would the debtor do that? Do you have such a statement in your possession?

  3. #3
    Join Date
    Mar 2007
    Posts
    4

    Default Re: Here's a good one for you......

    What does that have to do with the debt to you?
    1) The question concerning a check of mine that was forged is: can someone use bankruptcy to wipe out a debt concerning funds that were illegally received? The $2000 was included in the Civil case as part of the total debt, and the debtor also included the $2000 as part of the debt when filing bankruptcy.

    Why would the debtor do that? Do you have such a statement in your possession?

    2) In the Answer to the Civil summons, the debtor admitted this in a signed document. Yes, I have that statement in my possession

    Both items are related to determining if either constitutes fraud, which is grounds for revoking the discharge.

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Here's a good one for you......

    You indicated initially that you loaned this person money. Now you seem to be stating that you did not do so, but they forged a check and you entered into some sort of repayment agreement. Please explain exactly what happened.

  5. #5
    Join Date
    Mar 2007
    Posts
    4

    Default Re: Here's a good one for you......

    Easy enough. I had loaned the person money, and he was paying back monthly. Last year, I found a $2000 cash advance check in one of my credit card statements, obtained a copy of the cancelled check, and determined that this person had stolen the cash advance check and forged my name, and made the check out to himself. I confronted the person, who acknowledged forging the check, and promised to pay me back, but soon stopped paying altogether. I filed civil suit to cover the total amount, including the $2000 by forged check. The forged check was turned over to local police, who were ready to prosecute, but District Attorney's office did not want to pursue until civil case was out of way. Now that civil case has been dismissed by the bankruptcy, we are pursuing reopening the forgery case with local police and DA's office. If the DA's office will cooperate, then there is an excellent chance this person will be prosecuted of forgery, etc. So in addition to the amount of money loaned to the person, the person also obtained $2000 by forgery.

  6. #6
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Here's a good one for you......

    From what you are saying I would expect the original loan to be deemed dischargeable. You may be able to convince the court that you have proof of fraud through whatever is contained in the answer to the complaint - I wouldn't want to guess without having seen it. It would be even better if he admitted to a fraud on the record, and you can produce a transcript.

    The bad check should not be dischargeable.

    You can file a motion with the bankruptcy court to try to reopen the case to revisit the issue of your debts. I would suggest getting a lawyer's help to draft the motion, as it will improve the odds of its success. Also a lawyer will be able to advise you as to how factors not yet discussed in this thread will affect your chances, such as the amount of time which has passed since discharge.

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