Bankruptcy Fraud by Senior Citizens Can Result in Big Trouble
The bankruptcy process streamlines financial relief to deserving individuals, regardless of their age. Chapter 7 bankruptcy gives an elder debtor in Florida a fresh start financially by eliminating their unsecured debts. Normally, a Chapter 7 bankruptcy, for an elderly individual, takes about 4 or 5 months from the time of filing until the discharge of debts is entered.
The debtor’s bankruptcy case is assigned to a trustee. The trustee has many cases each month to review, the assigned trustee is normally just one trustee of a trustee panel. The bankruptcy judge oversees all the cases each of the panel trustees are assigned to them. Due to the high volume of Chapter 7 bankruptcy the process relies heavily upon honesty and candor of the senior debtor who is required to accurately account for all income, expenses, assets and debts. Most debtors are honest, but the Department of Justice (DOJ) estimates that one out of ten cases have some element of fraud attached to it. When fraud is suspected, bankruptcy trustees can recommend to the DOJ, the FBI, and the IRS for further investigation and potential criminal charges.
Bankruptcy fraud carries a maximum penalty of 5 years in prison and a $250,000 fine. Debtors convicted of bankruptcy fraud are sentenced to an average of 31 months in prison. Still, some people never learn.
According to an FBI-issued press release concerning a bankruptcy debtor’s guilty plea to fraud charges: Viengkham Virasak, 44, of Corvallis, Oregon, ran up debt in his family members’ names and after maxing out their cards he then filed bankruptcy cases in their names. Before being caught, Virasak discharged $87,500 in debt.
Jorge Droz Yapur was indicted by a federal grand jury for intent to defraud creditors as part of a Bankruptcy proceeding. Mr. Yapur, among other items, claimed his elderly mother as a dependent and claimed she was in a nursing home that he was paying for (by the way, we can always help our clients legally and ethically protect their assets to get Medicaid to pay for nursing home care – as well as ALF care and home health care).
Former major-league baseball player Lenny Dykstra was indicted on fraud charges with his bankruptcy filing. The indictment alleges that Dykstra sold items from his $18 million mansion after filing for bankruptcy protection. Once a Chapter 7 bankruptcy is filed the debtor’s assets become part of the “bankruptcy estate” which is the responsibility of the trustee to administer. The trustee’s investigation found that “Dykstra stole and destroyed more than $400,000 of property of the estate.”
Bankruptcy fraud is serious, and one should not take filing bankruptcy lightly, even our senior citizens. For the dishonest debtor their acts could cause the court to deny the discharge, or the debtor could face criminal charges. No matter your financial situation, discuss your options with an attorney who is experienced in elder person bankruptcy. The bankruptcy laws help the honest, but unfortunate debtor who needs financial relief. Your bankruptcy attorney will work to achieve the best legal result possible and keep you out of trouble if you fully disclose your situation.
The saying in the bankruptcy court is the honest debtor, who discloses all income, assets and creditors is entitled to a discharge of their debts. If you file remember, bankruptcy fraud is a serious and you must take disclosing financial information to your attorney seriously. Also, when reviewing and signing your bankruptcy petition and schedules, take the necessary time to fully review the documents and make sure everything is listed and correct. You are signing the documents under penalty of perjury; you are saying you reviewed the document and everything in it is correct.
At Elder Needs Law, PLLC, all we do is consumer asset protection, with a strong focus on the elderly. We protect assets from the government, nursing homes, spouses, family members, and creditors. If you are a senior facing hard economic times and have questions on what options are available to you and your family. Please consult with a bankruptcy professional that focuses their practice on the senior population. You have more options than you might think, and some options have hidden costs and fees you want to avoid. You owe it to your family to weigh all your options and to be fully informed with a plan of action in place. Please contact Elder Needs Law, PLLC at 305-614-7379 or look us up on the web at www.ElderNeedsLaw.com for more information on how the asset protection attorneys at Elder Needs Law, PLLC can help you and your family.