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No More Stigmata - Some Famous Bankruptcy Filers

2009-11-12T14:10:00.000-08:00

Declaring bankruptcy may have had bad connotations in the past, but that attitude is changing. Thirty years ago, filing for divorce had similar stigma, but it is so common today that people are rarely hesitant to discuss it. The negative connotation associated with bankruptcy filing is largely the creation of lending institutions, who do their best to make bankruptcy appear unattractive. With the huge numbers of households seeking bankruptcy protection, the profile of the average person who files for bankruptcy is not what you would expect.

Not only are the majority of people filing for bankruptcy decent, average people like you and me, but some of them are famous, well-respected, even historic figures. Check out this sampling of famous bankruptcy filers;

Dutch painter Rembrandt. Despite creating some of the greatest paintings in the history of art, Rembrandt went broke and filed for bankruptcy in 1656. After bankruptcy, he continued to paint great works of art.

Showman P.T. Barnum. Declared bankruptcy in 1894 due to poor investments. He later went on to organize the Barnum & Bailey Circus, “The Greatest Show on Earth.”

Singer Jerry Lee Lewis. In 1975, he lost most of his personal property to the IRS to cover back taxes. In 1988, he files for bankruptcy with around $3,000,000 in debts and no assets. Lewis continues to perform today.

Real-estate developer Donald Trump. Trump’s real estate investments made him a billionaire in the 1980s. In 1990, his business went bankrupt. He came close to personal bankruptcy too, reportedly owing around $900,000,000 himself. Trump is now wealthy again.

All of them went bankrupt, yet all of them went on to continued, or even greater, success than before their bankruptcy. While you financial problems are serious, they aren’t the end of the world. Declaring bankruptcy is often the beginning of a better life for you and your family, it you take the right approach.

If you are having financial hardship and are considering filling for bankruptcy, contact an experienced Las Vegas bankruptcy lawyer at Aaron & Paternoster by calling (702) 384-4111. We offer FREE confidential Las Vegas bankruptcy consultation. Protect your legal rights – contact Las Vegas bankruptcy attorney NOW.

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Aaron & Paternoster
2300 W. Sahara Avenue, Suite 650
Las Vegas, NV 89102
(702) 384-4111
http://www.aaronpaternoster.com/bankruptcy/

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Common Fraud Schemes Involving Bankruptcies

2009-09-14T15:59:00.003-07:00

Bustouts
A bustout is conducted by a company that is set up to fail from the outset. The operator obtains merchandise from creditors, disposes of the goods (usually for cash) and does not pay suppliers. A bustout can also be conducted by buying an existing company and using that company’s good credit to obtain goods, without the intent to pay, and then disposing of the goods immediately for cash.

Examples Of Bustouts
Distributors of Consumer Products (including cigarettes, diapers, etc.): Company operates for a short period of time and establishes good credit ratings with large consumer goods manufacturers. Orders increase suddenly, and payments are not made. Lulling techniques are used to forestall creditors. Goods are sold to retailers at below cost for cash. Afterwards, a bankruptcy petition is filed. Schedules filed by the debtor after the bankruptcy filing report trade debt owed to consumer products manufacturers with inventory unusually low compared to the date the debt was incurred.

Retail Bustouts: The merchant rents retail space and does not pay rent or suppliers. He files bankruptcy to stop eviction and to gain additional time to run the illegal operation. Oftentimes, retail stores are part of the distributor bustouts because they provide outlets for the consumable goods. (Examples include retail jewelry stores, oriental rug stores and discount stores.)

Tax Bustouts: An individual operates a series of businesses in the same industry and never pays taxes. He usually files Chapter 11 bankruptcy for the company just prior to or at the time the IRS files a lien on the debtor's assets. He operates the business for a brief period of time while in Chapter 11 before the case is onverted or dismissed. He starts a new business with the debtor's assets. (Examples include restaurants and employee leasing services.)

Credit Card Bustouts: Individuals contemplating bankruptcy run up large consumer credit card debt and then file bankruptcy. The purchases and cash advances occur within a short period of time. Frequently, the same individual files bankruptcy several times, using false social security numbers and aliases. Or the fraudulent perpetrator assumes another person's name or social security number. False statements are usually made on credit applications, and the assets acquired from the fraud are concealed when the bankruptcy is filed.

Travel Agency Bustouts: Travel agency opens and secures authorization plates from the airline cooperative agency to write tickets. After paying the first few bills, a tremendous number of tickets, often overseas tickets, are written and not paid for. These tickets are sold for cash in bargain sales. Travel agency may also report the authorization plates stolen and then continue the scheme. Authorization plates and blank ticket stocks are often missing when the trustee or airline tries to recover.

Identifying Bankruptcy Fraud

2009-09-14T15:59:00.001-07:00

The bankruptcy system is designed to give an individual or a company a chance to reorganize their affairs, or if reorganization is not possible, to equitably distribute the non-exempt assets of the debtor among the creditors. This is often referred to as “a fresh start”. The amount of money a creditor will receive in a case will range from nothing in many cases to 100 percent in a few cases. In every case there will be significant delays from the time a bankruptcy petition is filed until the case is closed and all creditors receive final payment.

The bankruptcy system is based on the theory that a debtor will make full disclosure of all assets and liabilities so that the final disposition is in accordance with the requirements of the law. Unfortunately, at times both debtors and creditors try to obtain more than they are entitled to under the Bankruptcy Code. There are a number of criminal statutes that prohibit this type conduct.

Although concealing assets or making false statements in a bankruptcy proceeding make up the majority of bankruptcy frauds, there are a number of fraud schemes that are more complicated or are primarily designed for reasons other than maximizing the retention of assets in bankruptcy. Such schemes often use the automatic stay provided by the Bankruptcy Code to conceal an earlier crime, maximize profit from an ongoing fraud scheme or buy time while the perpetrator finds a way to avoid victims or leave town.

A comprehensive list of fraud schemes will be presented in two articles. Within each fraud category examples of schemes will be presented, with red flags to look for, and courses of action to be pursued if a scheme is encountered. Again, keep in mind that this is a list of common warning signs in a fraud scheme. Many of these factors may be present in situations where there is no fraud, so do not jump to conclusions simply based on these warning signs.

Identifying Bankruptcy Fraud–Part 1 covers common fraud schemes involving bankruptcies and debtor fraud. Identifying Bankruptcy Fraud–Part 2 will focus on creditor fraud and professional fraud. Included in both articles is a list of warning signs of bankruptcy fraud.

Bankruptcy Fraud Warning Signs

2009-09-14T15:58:00.003-07:00

1. Concealment of assets
2. Serial bankruptcy cases
3. Failure to keep usual business records
4. Incomplete or missing books and records
5. Conduct well outside ordinary business or industry standards and practice
6. Unusual depletion of assets shortly before the bankruptcy filing
7. Recent departure of debtor's officers, directors or general partners
8. Unanswered questions or incomplete information on debtor’s schedules and statement of financial affairs
9. Frequent amendments to schedules, statements of financial affairs and monthly operating reports
10. Inconsistencies among recent financial statements, tax returns and debtor's schedules and statements of financial affairs
11. Absence of knowledgeable officers to testify at the Section 345 meeting
12. Inability to contact principals of debtor at debtor’s stated location
13. Frequent dealings in cash rather than recorded transactions
14. Sudden depletion of inventory post-petition without plausible explanation
15. Inflated salaries, payments of bonuses or cash withdrawals by officers, directors, shareholders or other insiders
16. Transfer of property to insiders, shareholders and relatives shortly before bankruptcy
17. Payoff of loans to directors, officers, shareholders, relatives or other insiders shortly before filing.
18. Transactions with non-debtor subsidiaries, parent companies or affiliated corporations owned by the same or related persons or entity
19. A history of prior litigation or post-petition litigation involving breech of contracts, fraud misrepresentations, etc
20. Complicated corporate structures and relationships.
21. Creditor confusion concerning corporate structure.
22. Fire, theft or loss prior to or after filing.
23. Failure to pay withholding and sales tax.
24. Startup of a similar business near the time of bankruptcy filing.

Bankruptcy Statistics

2009-09-14T15:58:00.001-07:00

The Administrative Office of the U.S. Courts compiles statistics on bankruptcy filings for each quarter ending December, March, June and September. The fiscal year for the federal Judiciary ends September 30. The calendar year ends December 31. Quarterly and 12-month statistics are available approximately 2 months after the close of a quarter.

Chapter 11 and Chapter 13 bankruptcy filing for the twelve month period ending September 20, 2008:

Chapter 11 California Bankruptcy Filing: 83,975
Chapter 13 California Bankruptcy Filing: 27,180

Las Vegas Bankruptcy Basics Videos

2009-08-26T08:11:00.000-07:00

Las Vegas bankruptcy law is designed to free people from economic bondage and give them a fresh start. Las Vegas bankruptcy law provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors. Check out some of these informational videos:

Las Vegas Bankruptcy Basics - Part 1

IntroductionBankruptcy is a legal process that provides relief to many individuals who can no longer pay all of their debts. | Watch Video

Las Vegas Bankruptcy Basics - Part 2

Types of BankruptcyThere are three main types of bankruptcy cases for individuals, the most common of which are chapter 7 and chapter 13. | Watch Video

Las Vegas Bankruptcy Basics - Part 3

Limits of BankruptcySome debts cannot be discharged in a bankruptcy. | Watch Video

Las Vegas Bankruptcy Basics - Part 4

Filing for BankruptcyIn order to file for bankruptcy, an individual must take a credit counseling course and accurately complete and file a number of documents. | Watch Video

Las Vegas Bankruptcy Basics - Part 5

Creditors' MeetingEvery debtor is required to appear at a creditors' meeting conducted by a trustee who asks the debtor questions about the debtor's financial condition and gives creditors the opportunity to do the same. | Watch Video

Las Vegas Bankruptcy Basics - Part 6

Bankruptcy CrimeA debtor must be honest and accurate in dealing with the court or face serious consequences, including being charged with a bankruptcy crime. | Watch Video

Las Vegas Bankruptcy Basics - Part 7

Court HearingsIn some cases, a debtor may be required to appear at hearings before a bankruptcy judge. | Watch Video

Las Vegas Bankruptcy Basics - Part 8

The DischargeDebtors are usually able to discharge most or all of their debts. Once a debt is discharged, a creditor may not attempt to collect it from the debtor. | Watch Video

Las Vegas Bankruptcy Basics - Part 9

Legal AssistanceDebtors are strongly encouraged to find competent legal counsel. Even if you cannot afford to pay an attorney, you may be able to qualify for free or discounted legal services. | Watch Video

If you are having financial hardship and are considering filling for bankruptcy, contact an experienced Law Vegas Bankruptcy lawyer at Aaron & Paternoster by calling (702) 384-4111. We offer FREE confidential bankruptcy consultation, so call today.

We Are A Debt Relief Agency
Free Bankruptcy Law Las Vegas Consultation
Call (702) 384-4111

Las Vegas Bankruptcy

2009-07-30T17:01:00.000-07:00

Aaron & Paternoster
2300 W. Sahara Avenue
Suite 650 Las Vegas, NV 89102

Telephone: (702) 384-4111

Las Vegas bankruptcy law is designed to free people from economic bondage and give them a fresh start. Las Vegas bankruptcy law provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors.

A Las Vegas bankruptcy attorney at Aaron & Paternoster will guide you through the complicated legal maze to file for Bankruptcy in Nevada under the U.S. Bankruptcy code. We are a debt relief agency that stops Tax Liens, Home Foreclosures, Creditor Harassment, Auto Repossession, Wage Garnishment, and Medical Bills through the use of Bankruptcy. Bankruptcy is a tool that can stop harassing phone calls and can assist in getting you out of debt and back on track.Our Las Vegas bankruptcy attorneys are experts at handling Chapter 7 Bankruptcy and Chapter 13 Bankruptcy filings. Contact us using for the form to the right and speak with a Las Vegas bankruptcy lawyer today.

If you are having financial hardship and are considering filling for bankruptcy, contact an experienced Law Vegas Bankruptcy lawyer at Aaron & Paternoster by calling (702) 384-4111. We offer FREE confidential bankruptcy consultation, so call today.

We Are A Debt Relief Agency
Free Bankruptcy Law Las Vegas Consultation
Call (702) 384-4111

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