Be careful about the claims you file in Bankruptcy Court. They are watching you.

I am sure that my colleagues need no admonition from me about filing claims in bankruptcy court.  Still, I found an article that worth mentioning to my fellow collection attorneys around the country, entitled “Cleveland Man Indicted on Charges of Making False Claims in Bankruptcy Court.”  Lets look at it.

Tennessee ranked second in the nation last year for bankruptcy filings.  In this case, a federal grand jury indicted John O’Neal for making a false statement in a bankruptcy matter.  In my 20 years of practice, I have seen very few criminal actions resulting from claims made in the bankruptcy court in Michigan.  That’s not to say that they have not happened but only that I have not heard of any.  Nevertheless, it appears that Mr. O’Neal submitted false documents in June 2010 in an attempt to influence his bankruptcy plan.  If convicted, he faces up to 20 years in prison.

From my perspective, if bankruptcy courts will refer debtors to the prosecutor’s office, there is nothing to stop them from referring creditors who file false or highly inflated claims as well.  The article suggests that Mr. O’Neal’s case appears to be the beginning of an initiative in the Eastern District of Tennessee, to make debtors and probably everyone else involved in a bankruptcy proceeding, accountable for documents that they submit to the court.

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This entry was posted on Sunday, April 3rd, 2011 and is filed under Debt Collection Laws - Federal . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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