A recent Tampa bankruptcy case has led to federal prosecution for bankruptcy fraud and likely jail time for a wife who trusted her husband. The Tampa Tribune reports that Joanne Cone is facing a possible five years in prison for conspiring with her husband to concel assets from the bankruptcy court.
Michael Cone, the former president of a road contracting company, has been sentenced to a fifteen year prison term for bankruptcy fraud. His wife, Joanne, claims that she had minimal knowledge of her husband's business and that her signature on bankruptcy paperwork did not reflect an intent to defraud the bankruptcy court.
Whether or not you believe Mrs. Cone, let her experience serve as an important lesson. If you sign your name to a bankruptcy petition you are asserting under oath and under penalty of fraud that the information contained therein is true. As Mrs. Cone has discovered, it is much more difficult to later claim that you had no knowledge of your spouse's business.
What should you do if both you and your spouse need to file bankruptcy, but you have some misgivings about the truthfulness of your spouse's disclosures?
First, you should seek your own counsel. Attorneys are not permitted to represent clients with conflicting interests, even if those clients are married. Most consumer bankruptcy lawyers will speak with you at no charge. At Clark and Washington, we are happy to schedule an office appointment at no charge. If you are concerned that your spouse is lying on his/her petition, you may file your own petition that reflects your financial situation as you know it to be.
Read the Tribune story carefully. Apparently, Mr. Cone had the opportunity to accept full responsibility and spare his wife a prison sentence. He apparently believed in his innocence and lost at trial. Now his wife is facing five years.
Situations and relationships change. If you are sitting in a bankruptcy lawyers office, you need to do what is best for you.
Filed under Chapter 7, Discharge issues, Scams and Fraud by 
Where do John McCain and Barack Obama stand on the nation's housing crisis? on bankruptcy reform, on economic issues that affect Americans fighting to avoid bankruptcy. Reuters news service has published a useful summary, which I am reprinting here:
McCain:
1. Proposes to spend up to $10 billion to allow some homeowners to trade high-interest, adjustable-rate mortgages for fixed-rate loans.
2. Proposes a suspension of the 18.4-cent federal gas tax and 24.4-cent diesel tax during the summer.
3. Supports a middle-class tax cut by doubling the personal tax exemption for dependents to $7,000.
4. Calls for a simpler tax system with two tax rates and a generous standard deduction.
5. Supports making permanent the 2001 and 2003 income tax cuts and proposes cutting the corporate tax rate to 25 percent from 35 percent and allowing businesses to immediately write off capital expenses.
6. Believes government assistance to the banking system should focus on preventing systemic risk that would endanger the financial system and the economy.
Obama:
1. Calls for greater government regulation of the U.S. financial system and proposes a new $30 billion economic stimulus plan to help homeowners, including a $10 billion foreclosure prevention fund to help people keep their homes and $10 billion in relief for state and local governments hit hardest by the housing crisis.
2. Outlines six “core principles for reform” that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.
3. Wants to repeal a provision in the bankruptcy law so ordinary families can modify terms of home mortgages.
4. Proposes a 10 percent mortgage tax credit for middle-class Americans.
Of course, campaign promises and even party platforms don't mean a whole lot, but it is interesting to observe how differently the candidates approach the problem. Which approach makes the most sense to you – both in the near term and in the long term?
Thanks to Port Richey real estate agent Tish Osborne for publishing this comparison table on her Real Town blog.
Filed under Bankruptcy legislation, Foreclosure issues by
Part of the bankruptcy work that Clark and Washington does with our Chapter 13 clients involves the creation of a budget that will become part of the bankruptcy petition and filed with the clerk of bankruptcy court.
By law, Chapter 13 cases must last a minimum of 3 years, although many of the Chapter 13 cases we file will end up lasting 5 years.
It is hard enough to prepare a budget for the next six months – how can anyone possibly predict 5 years into the future? There is no absolute answer to this – here is how we approach this problem:
- the Bankruptcy Code does allow us to file an amended budget. If your income goes down, or goes up, we can revisit your case and change your plan. Generally it is more difficult if you want to reduce your plan payment – we will have to appear before your judge to explain why your plan payment needs to decrease.
- when calculating a budget, we try to identify expenses that you know you will have. For example, if you know that you will need a $3,000 dental surgery within the next year, we can build that cost into your monthly medical budget. Car maintenance issues like new tires, 100,000 mile service, etc. can also be planned. You may need to gather documentation for these future expenses, but a little work on the front end can make your plan a lot more livable.
- you need to communicate with our office. Our job as your attorneys is to prepare and file a workable Chapter 13 plan and to work with you to keep that plan working. If you foresee a temporary layoff or a job change, you need to let us know. In some instances we can get a short term suspension of your Chapter 13 payment.
- in preparation for filing, you should gather receipts and think very carefully about your Chapter 13 budget. Budget estimates are appropriate in some circumstances but inaccurate estimates in the context of a bankruptcy case can get you in trouble.
Filed under Bankruptcy budgets, Preparing for bankruptcy by
After you file a Chapter 7 or a Chapter 13 bankruptcy, you will be required to attend a brief hearing called a Section 341 Meeting of Creditors. Bankruptcy professionals usually refer to this hearing as a "341 hearing."
Your 341 hearing will be held between 30 and 45 days after you file and it will last about 5 to 10 minutes. Although nothing final happens at your 341 hearing and most of the questions are fairly simple, you may be concerned about this hearing. Assuming that you have never been thorough bankruptcy before, it is perfectly understandable that you would be a little nervous. In this short video, Clark and Washington associate attorney Laura Post talks about 341 hearings. If you have any questions about 341 hearings – please feel free to call Laura or any of our staff lawyers.
Filed under Hearings by
Every week, Clark and Washington gets calls from elderly clients asking for information about bankruptcy because of unmanageable debt. And all too often, this debt arises because the senior overspent on television home shopping programs or because the senior succomed to the pitch of a telemarketer.
Last year the New York Times ran a story called "Bilking the Elderly, With a Corporate Twist." The story documents the process of how mailing list vendors compile detailed information about seniors using telemarketing phone scripts, and how these lists are sold to unscrupulous companies who rip off elderly victims by selling useless products and services.
One company, InfoUSA Info advertised lists of “Elderly Opportunity Seekers,” consisting of 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”
Often bankruptcy can eliminate the debt that arises from these scams, but not before a senior loses his life savings or puts his home at risk. If you are a senior or if you are a family member of a senior:
- put your name on the national no-call directory
- avoid revealing personal information if you enter sweepstakes as many sweepstakes are designed to collect personal information that will be sold to telemaketers
- create a "disposable" email address with Yahoo or Hotmail for use in any online form
- never reveal bank or credit card information to an unknown caller
- don't be afraid to hang up if you feel uncomfortable
Filed under Causes of bankruptcy by
