How to Prove Chapter 13 Bankruptcy Fraud
Chapter 13 bankruptcy fraud is essentially when a debtor lies about his financial condition within his bankruptcy documents, during an examination, during the meeting of creditors or in front of a bankruptcy judge. Proving bankruptcy fraud involves initiating a full-blown lawsuit in bankruptcy court against the debtor to deny the debtor a discharge. Proving fraud can be very time-consuming and expensive and should only be undertaken if the ends justify the means.
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Instructions
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Conduct a Rule 2004(a) examination of the debtor. Such an examination can only be conducted prior to the filing of a lawsuit and is compared to a "fishing expedition." File a written motion with the bankruptcy court requesting an examination of the Chapter 13 debtor under Rule 2004(a) of the Federal Rules of Bankruptcy Procedure. Explain why you want to examine the debtor, such as, you believe the debtor has committed bankruptcy fraud.
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Examine the debtor after approval by the bankruptcy court. During the examination, you are permitted to ask any question regarding the debtor's financial condition and his bankruptcy documents. Try to establish discrepancies between the bankruptcy documents and the debtor's testimony.
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Conduct the deposition of the debtor's business associates or family members after the filing of a lawsuit against the debtor. Establish that there was fraud by demonstrating discrepancies between the true financial condition of the debtor and the information disclosed on the bankruptcy documents. For example, if you discovered an undisclosed house in another state owned by the debtor, you would have a strong case for fraud.
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Initiate discovery in the form of document requests to various third parties such as escrow companies, banks, investment companies and other entities where you believe the debtor may be hiding assets. Use the documentation to demonstrate fraud due to a failure to disclose the assets in the bankruptcy documents.
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Tips & Warnings
This article does not constitute legal advice. See an attorney.
