《楊清泉律師專欄》DISORGANIZED FINANCIAL RECORDS MAY RESULT IN DENIAL(part II)
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DISORGANIZED FINANCIAL RECORDS MAY RESULT IN DENIAL OF BK DISCHARGE
《楊清泉律師專欄》DISORGANIZED FINANCIAL RECORDS MAY RESULT IN DENIAL OF BK DISCHARGE(一)
In Re Sohmer, debtor a bankruptcy lawyer, filed for Chapter 11 relief in 2006 and subsequently converted to Chapter 7. During the two-year period preceding the bankruptcy, debtor established Timeless Funding Inc., a foreclosure rescue program. Over the 2 years, 25 homeowners lost ownership of their homes through their participation in the program. When debtor filed for bankruptcy, he held an ownership interest in 22 properties in addition to his home and office. Late in 2006, debtor was sued by Massachusetts. The state obtained a temporary restraining order against him that prohibited him from mortgaging his home. Despite the TRO, debtor refinanced his home and did not disclose this refinancing in his bankruptcy schedules... The state and the US Trustee asked the court to deny debtor’s discharge. The court found that they debtor knowingly and fraudulently made false oaths on his Schedules and Statement of Financial Affairs and at his Section 341-A meeting and that those false statements were material and intended to mislead the trustee and creditors. The court pointed out that the debtor did not schedule six bank accounts including one account that was opened just two days pre-petition and used to deposit funds post-petition. The court also found that the records maintained for Timeless Funding were not necessarily contemporaneous with actual receipts and disbursements and that the debtor commingled his receipts and disbursements from the Timeless Funding transactions with his law practice and personal affairs. “Although the debtor kept books and records, the books and records he kept were wholly inadequate for the trustee to understand his financial affairs without the expenditure of considerable time and effort. While the absence of records can conceal the debtor’s financial condition, a surfeit of disorganized, un-reconciled, and commingled accounts can have the same effect. As a bankruptcy attorney engaged in complex legal and financial transactions, the debtor’s accounting system-statements prepared using word processing software and an un-reconciled QUICKBOOKS software program-was woefully inadequate for the complexity and volume of the Timeless Funding transactions, preventing the trustee and his accountant from understanding the debtor’s finances within a reasonable amount of time,” the court said and denied the debtor’s discharge.
Therefore, I suggest that you keep accurate records of your personal and business transactions. Do not throw away bank and credit card statements. You may need them to get your bankruptcy discharge.
Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.
《楊清泉律師專欄》DISORGANIZED FINANCIAL RECORDS MAY RESULT IN DENIAL OF BK DISCHARGE(一)
In Re Sohmer, debtor a bankruptcy lawyer, filed for Chapter 11 relief in 2006 and subsequently converted to Chapter 7. During the two-year period preceding the bankruptcy, debtor established Timeless Funding Inc., a foreclosure rescue program. Over the 2 years, 25 homeowners lost ownership of their homes through their participation in the program. When debtor filed for bankruptcy, he held an ownership interest in 22 properties in addition to his home and office. Late in 2006, debtor was sued by Massachusetts. The state obtained a temporary restraining order against him that prohibited him from mortgaging his home. Despite the TRO, debtor refinanced his home and did not disclose this refinancing in his bankruptcy schedules... The state and the US Trustee asked the court to deny debtor’s discharge. The court found that they debtor knowingly and fraudulently made false oaths on his Schedules and Statement of Financial Affairs and at his Section 341-A meeting and that those false statements were material and intended to mislead the trustee and creditors. The court pointed out that the debtor did not schedule six bank accounts including one account that was opened just two days pre-petition and used to deposit funds post-petition. The court also found that the records maintained for Timeless Funding were not necessarily contemporaneous with actual receipts and disbursements and that the debtor commingled his receipts and disbursements from the Timeless Funding transactions with his law practice and personal affairs. “Although the debtor kept books and records, the books and records he kept were wholly inadequate for the trustee to understand his financial affairs without the expenditure of considerable time and effort. While the absence of records can conceal the debtor’s financial condition, a surfeit of disorganized, un-reconciled, and commingled accounts can have the same effect. As a bankruptcy attorney engaged in complex legal and financial transactions, the debtor’s accounting system-statements prepared using word processing software and an un-reconciled QUICKBOOKS software program-was woefully inadequate for the complexity and volume of the Timeless Funding transactions, preventing the trustee and his accountant from understanding the debtor’s finances within a reasonable amount of time,” the court said and denied the debtor’s discharge.
Therefore, I suggest that you keep accurate records of your personal and business transactions. Do not throw away bank and credit card statements. You may need them to get your bankruptcy discharge.
Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.
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