Bankruptcy new laws and fraud?

Question

I manage a payday loan company, first time with a customer filing bankruptcy (chapter 7) I know the new laws had the changes to the amounts of median income, credit courses required, etc, but....I have a customer that just took out a loan on 10-29-2008...Filed BK on 11/03/2008. He did this with 2 other companies, basically within a couple days of the loans turned around and filed bk...Isn't this considered fraud? I know I can file a claim after I get notification from the courts, but seems to me that this individual basically borrowed the money with all intent to use for retainer fees and now has filed. Can we do anything about this with the bk courts? Any suggestions would be appreciated. Thanks!

SPIFIMAN1 · Accepted Answer

Hi girl.

You can show up at the hearing for creditors and protest that this was fraud and I would bet that the judge will agree with you.

STEVEN F · Answer

The answer may vary by jurisdiction.  Many places would presume fraud if ANY loan is taken out, or paid ahead within a few days of filing bankruptcy.  At least in the US, the court has the power to 'undo' such transactions.  I recommend consulting a local bankruptcy attorney for accurate information for your area.

moonbeam · Answer

I was always told that if you purposely get loans or credit cards before you file that you commit fraud. I f you are considering BK you know for awhile that you are gonna go down that road. You dont wake up one morning and feel like filing. So I believe it was fraud.....Later.

Anonymous · Answer

No bk is bk. It's not what you know, it's what you can prove.

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Bankruptcy new laws and fraud?

4 Answers