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  1. #1
    steven200738 is offline Junior Member
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    Discharged In Bankruptcy???

    What is the name of your state (only U.S. law)? Minnesota. I have a judgment against a business. The sole owner of that business filed for bankruptcy personally and put my civil suit on his petition. I am now told (by a bankruptcy judge) that unless I can prove the owner owes me the money personally (which he doesn't, the company does), the debt will be discharged in bankruptcy court. Is this true? The owner claims the company went out of business. All assets and money were transferred before he filed for bankruptcy personally. I just want to make it clear that the company did not file for bankruptcy. The owner did personally and put all of the company debt on his bankruptcy petition. How is this possible? I have enough evidence to prove bankruptcy fraud and tax evasion. Will someone please chime in on these issues? Thanks.What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?
  2. #2
    Proserpina is offline Senior Member
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    Quote Originally Posted by steven200738 View Post
    What is the name of your state (only U.S. law)? Minnesota. I have a judgment against a business. The sole owner of that business filed for bankruptcy personally and put my civil suit on his petition. I am now told (by a bankruptcy judge) that unless I can prove the owner owes me the money personally (which he doesn't, the company does), the debt will be discharged in bankruptcy court. Is this true? The owner claims the company went out of business. All assets and money were transferred before he filed for bankruptcy personally. I just want to make it clear that the company did not file for bankruptcy. The owner did personally and put all of the company debt on his bankruptcy petition. How is this possible? I have enough evidence to prove bankruptcy fraud and tax evasion. Will someone please chime in on these issues? Thanks.What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?
    You need to attend the 341 creditors meeting and file an adversary complaint.
  3. #3
    steven200738 is offline Junior Member
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    Not Understanding

    I already did that dogmatique. I'm well past that stage. 3 out of 4 counts have been dismissed and the last one I was informed by a bankruptcy judge would be dismissed if I can't prove the owner personally owed me the money, which he did not.
  4. #4
    Proserpina is offline Senior Member
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    Quote Originally Posted by steven200738 View Post
    I already did that dogmatique. I'm well past that stage. 3 out of 4 counts have been dismissed and the last one I was informed by a bankruptcy judge would be dismissed if I can't prove the owner personally owed me the money, which he did not.
    Yes, he may indeed be able to include business debts in a personal ch.7 filing - much depends on how the company is/was organized (sole proprietorship, a corporation, a partnership, etc.); if he's the sole proprietor he is generally permitted to include business debts in his personal filing without the need for the company itself to file.

    It would seem that the Trustee and/or judge agree with him if they've already indicated 3 out of your 4 complaints will be dismissed and eventually discharged. You may still appeal after the decision is made but you have a very short window in which to do so (I believe you only have 10 days after the discharge date).

    Honestly, the best advice anyone can give you at this point is to speak with a bankruptcy attorney - it may be well worth the money.

    Out of interest, what is it that you are trying to prove and what kind of evidence do you have?
  5. #5
    steven200738 is offline Junior Member
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    Actually Dogmatique, I already have a judgment against the company for unpaid wages, but as I stated earlier, the owner claims the company is out of business and has transfered all assets to the secratary (yes, I have documents supporting this), so there is nothing to collect.

    The Department of Labor and Industry has revoked his business license for that company and has denied him another. As far as the evidence I have proving bankruptcy fraud and tax evasion, I have dozens of documents that he/they have submitted including bank records and so forth. I think that I have an obligation to report the owner to the Department of Justice for bankruptcy fraud and the IRS for tax evasion. I am an honest, hard working man and think people like this should be behind bars, not the president of a company. Any thoughts or advice Dogmatique?
  6. #6
    Proserpina is offline Senior Member
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    Quote Originally Posted by steven200738 View Post
    Actually Dogmatique, I already have a judgment against the company for unpaid wages, but as I stated earlier, the owner claims the company is out of business and has transfered all assets to the secratary (yes, I have documents supporting this), so there is nothing to collect.
    Yes, I understood that. But that judgment will apparently qualify for discharge in his bankruptcy. Transferring assets is NOT necessarily a crime, even when it's done leading up to a bankruptcy filing.


    The Department of Labor and Industry has revoked his business license for that company and has denied him another. As far as the evidence I have proving bankruptcy fraud and tax evasion, I have dozens of documents that he/they have submitted including bank records and so forth. I think that I have an obligation to report the owner to the Department of Justice for bankruptcy fraud and the IRS for tax evasion. I am an honest, hard working man and think people like this should be behind bars, not the president of a company. Any thoughts or advice Dogmatique?
    Yes - as before, you really need to speak with an attorney. If you think there is criminal wrongdoing you also need to get in touch with perhaps the DA with your evidence.

    I'm not clear on one part though - did you submit your evidence alleging bankruptcy fraud to the bankruptcy trustee?
  7. #7
    steven200738 is offline Junior Member
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    The bankruptcy trustee was notified of the alleged bankruptcy fraud. He said he wanted to see certain dollar amounts in assets in order to file a complaint on my behalf. He was shown almost triple of what he required. When it came time to step up to the plate and file the complaint, he said he was "too busy" and that I could "hire an attorney to do the work on his behalf", but I would need to pay that attorney. It doesn't seem fair, and I'm not trying to get him in trouble, but I am thinking on taking it over his head. If he is truly too busy, then he needs to get help and NOT let people get away with bankruptcy fraud. I don't mean to preach, but the Department Of Justice website makes it seem like they take it VERY seriously. This trustee seems to be more concerned with working too many hours in a week. That's just my opinion.
    Last edited by steven200738; 10-28-2009 at 07:45 PM. Reason: improper wording
  8. #8
    Proserpina is offline Senior Member
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    Quote Originally Posted by steven200738 View Post
    The bankruptcy trustee was notified of the alleged bankruptcy fraud. He said he wanted to see certain dollar amounts in assets in order to file a complaint on my behalf. He was shown almost triple of what he required. When it came time to step up to the plate and file the complaint, he said he was "too busy" and that I could "hire an attorney to do the work on his behalf", but I would need to pay that attorney. It doesn't seem fair, and I'm not trying to get him in trouble, but I am thinking on taking it over his head. If he is truly too busy, then he needs to get help and NOT let people get away with bankruptcy fraud. I don't mean to preach, but the Department Of Justice website makes it seem like they take it VERY seriously. This trustee seems to be more concerned with working too many hours in a week. That's just my opinion.
    Did you actually file the complaint?

    When is this case due to be discharged?
  9. #9
    steven200738 is offline Junior Member
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    The Trustee was notified, but no complaint was filed because he was "too busy". I have not contacted the Department Of Justice yet. The case will be discharged next month sometime.
  10. #10
    Ronin is offline Member
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    It is very unlikely you will be effective with any attempts to go over a bankuptcy trustee's head in federal court and get him into trouble over your problems.

    When creditors face the kinds of problems you do, their attorneys are expected to handle these tasks, and it is not the trustees job to individually manage the problems of the creditors by preparing filings on their behalf.

    Guess if you have nothing to lose and cannot afford an attorney, you can certainly file a complaint and see how far that flies...
  11. #11
    steven200738 is offline Junior Member
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    Ronin, it's not that I'm trying to get the trustee in trouble, I'm trying to get him to do his job. He told us he would help if we brought him certain information, and when we brought him more than what he asked for, he did nothing.

    What a cop out, saying he's too busy and that I could hire another attorney to do his job. I mean, what if you called the police because someone was breaking into your home and the police said "we're too busy, but we could send police from another station, and you would have to pay them out of your own pocket"? Would you think that's fair? It's absolutely ridiculous is what it is.

    The trustee has a job to do, and when he can't even do the basic job of looking over the petition and seeing major flaws, I think that's a problem. Just one example is the petitioner claiming to make about $1,000 a month, but yet, according to his own documents, the petitioner has over $8,000 a month in bills which somehow he has been paying for years. Let's not also forget that the petitioner is also the sole owner of a successful business.

    I'm a high school graduate with no college, so if I can spot these major flaws, the trustee should certainly have no problem. I don't know what you could possibly say to convince me otherwise. I am here for advice of my own free will and I do respect your input, but I respectfully disagree.
  12. #12
    Ronin is offline Member
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    While you may disagree on principle, as a practical matter, if push comes to shove, it is unlikely you will get the results you would like by filing any complaints in federal court against the trustee. If this attempt at redress fails, and you are unable to do what the trustee requested of you, then the debt owed to you may end up being discharged in bankruptcy.

    But I could be wrong. File the complaint and see how far it flies...
  13. #13
    Proserpina is offline Senior Member
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    What a cop out, saying he's too busy and that I could hire another attorney to do his job. I mean, what if you called the police because someone was breaking into your home and the police said "we're too busy, but we could send police from another station, and you would have to pay them out of your own pocket"? Would you think that's fair? It's absolutely ridiculous is what it is.
    Don't do that. There is a MASSIVE difference between an urgent, perhaps life-endangering emergency and a civil matter. Come on - you know this

    Also YOU have the option of filing an adversarial complaint - if you didn't that's not the fault of the trustee.

    The trustee has a job to do, and when he can't even do the basic job of looking over the petition and seeing major flaws, I think that's a problem. Just one example is the petitioner claiming to make about $1,000 a month, but yet, according to his own documents, the petitioner has over $8,000 a month in bills which somehow he has been paying for years. Let's not also forget that the petitioner is also the sole owner of a successful business.
    He could have income from a spouse or anything; there's no law against having someone else pay your bills (though in bankruptcy yes, it can be suspicious). But you need PROOF. Not allegation, not suggestion, not assumption...but proof.

    I'm a high school graduate with no college, so if I can spot these major flaws, the trustee should certainly have no problem. I don't know what you could possibly say to convince me otherwise. I am here for advice of my own free will and I do respect your input, but I respectfully disagree.
    You've already made up your mind - your next step is to hire an attorney to assist you in this matter.

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