Whether or not you are a reader of MckMama (or mommy blogs in general), this post has good information on bankruptcy fraud.  Last week we looked at the bankruptcy filing of Jennifer Howe Sauls McKinney and Israel McKinney, and discussed the many red flags of fraud that have been detected. Jennifer / MckMama has made a very public spectacle of her life, her finances, and her many money-making scams on her blog My Charming Kids, and things may finally be catching up to her.

Today the bankruptcy trustee filed a motion objecting to exempt property, essentially asking the judge to order that certain assets are NOT exempt from the bankruptcy. What does this mean?

Normally, certain assets are exempt in a Chapter 7 bankruptcy filing. The filer is allowed to keep basic items necessary for life, such as a home (up to the amount of your state’s homestead exemption), a car (up to your state’s permitted exemption), household goods and furnishings (up to a value of $11,525, with no single item worth more than $550), retirement accounts, and clothing.

There is a catch, however. You must disclose all of your assets when you file bankruptcy. If you fail to disclose all of the assets, and the trustee finds out about them, the trustee can take possession of them and sell them. The proceeds will go to your creditors.

In March, Jennifer McKinney and Israel McKinney participated in a creditors meeting, during which the trustee was able to ask them questions about their finances and the information disclosed in their bankruptcy papers. According to the Handbook for Chapter 7 Trustees:

The § 341(a) examination of the debtor is an important opportunity to discover potential criminal activity. During this meeting, and while the debtor is under oath, the trustee may acquire or develop facts that may indicate a potential bankruptcy related crime. For example, debtors may lie during questioning on recent repayments of debts, gifts or transfers to insiders. In all cases where the trustee suspects criminal activity after questioning at the § 341(a) meeting, the trustee should immediately notify the United States Trustee so that the § 341(a) meeting tape may be properly secured and stored to preserve its later use in a criminal proceeding.

During the meeting, it became clear that Jennifer and Israel did not disclose all of their assets in their bankruptcy paperwork. In the original bankruptcy filing of Jennifer and Israel McKinney on December 13, 2011, MckMama claimed personal property totaling $44,425, and claimed $39,840 of that property was exempt. Following the § 341 creditors meeting, the McKinneys filed amended information on April 12, 2012. In that amended filing, the personal property totaled $46,300, and claimed that $43,325 was exempt.

The bankruptcy trustee is now asking the court to disallow exemptions for the following assets that were undisclosed in the original filing:

  • PayPal Account – balance unknown
  • Accounts Receivable – $1,460
  • 1950 Camper – shown in the amended paperwork as $750
  • Domain names mycharmingkids.net and mckmama.com – shown in the amended paperwork as $100

As we discussed last week, the domain names are far more valuable than the $100 MckMama disclosed for them. The value of the web properties also should include the copyrighted content that was published at those URLs. The writings and the pictures on Jennifer McKinney’s websites have substantial value above and beyond just the domain names, and so those valuable assets should become the property of the bankruptcy trustee as well.

Undisclosed Income

In last week’s article, we discussed the undisclosed income of Jennifer McKinney. Despite making substantial money from her blogging activities in the months prior to and including the month of the bankruptcy filing, she claimed she would gross only $1,500 per month from her blog going forward. During the creditors meeting, the trustee uncovered thousands of dollars of advertising income and photography income. In addition, there are likely thousands of dollars of income from affiliate programs, for which the trustee may not have documentation yet.

The amended bankruptcy schedules filed by the McKinneys showed only $55,000 of income from Jennifer’s blogging/photography business for 2011, despite the fact that the bankruptcy trustee uncovered more than $148,000 of income and discussed it with Jennifer and Israel during the creditors meeting.

Undisclosed income can be considered an abuse of the bankruptcy process, and it is one of the factors that may lead to a dismissal of the bankruptcy filing, with the debtor left to pay all her debts.

Undisclosed Transfers

An issue that has not yet been addressed by the bankruptcy trustee is the transfer of assets prior to the bankruptcy filing, and failure to disclose those transfers in the bankruptcy paperwork. Specifically, Israel and Jennifer McKinney had two garage sales shortly before the bankruptcy filing, and MckMama stated online that a number of specific items were sold, and that one of the garage sales was “a big hit.”

MckMama also clued us in to other transfers in an August 27, 2011 bog post in which she said she had friends permanently “storing” furniture for her.

Payments to Creditors

One more issue that may need to be dealt with by the bankruptcy trustee is the payment of creditors before the bankruptcy filing. Such a payment can be considered a preference, meaning that creditor received more than he would have if the payment was not made and the full debt was included in the bankruptcy.

We found out during the creditors meeting that Jennifer’s father, John Sauls, was paid $1,200 toward a debt owed to him by Jennifer in the months leading up to the bankruptcy filing. The trustee could elect to recover this amount from Mr. Sauls and then distribute it to other creditors.

What’s Next?

I have no idea what issues the bankruptcy trustee is continuing to pursue. I hope he continues to dig into Jennifer Howe Sauls McKinney’s income, which will likely reveal substantial income above what has been reported. I also hope that he pursues the transfers of assets prior to the bankruptcy, as these may be substantial. I will continue to update this story as new information becomes available.


  1. heather 04/30/2012 at 11:38 pm - Reply

    Thank you so very much for such a well-thought out and insightful article. Learning of Mrs. McKinney’s flagrant disregard for the laws governing bankruptcy is sickening. I am looking forward to learning the outcome of this bankruptcy case. Thank you for your pledge to provide updates as they become available. All the best to you!

  2. Kerrie 05/01/2012 at 1:24 am - Reply

    I suspect that Mr. Doeling (the Trustee) will pursue the McKinneys vigorously. They (poorly) hid income & assets & outright lied under oath. They also were rude to and tried to outsmart him. I doubt hewill be feeling kindly towards them.

    These scammers tried to take advantage of a system put in place for those who desperately need it, to selfishly rid themselves of debt they racked up while earning hundreds of thousands of dollars. Where the hell they spent that money is anyone’s guess.

    What irks me most is that JenniferHoweSaulsMcKinney is filing and expecting the taxpayers to usurp this huge debt while professing not to believe in socialism. Something truly stinks about the way her entitled mind works.

    While I’d love to see her imprisoned I fear for the trauma inflicted on her children if that were the case. I hope she has to pay her debts forevermore and has to complete a community based program as penalty. Given JHSMcK never farts without wondering how she can market it to her rabid followers, to see her do many hours of physical work for no fiscal reward (to her), would be an appropriate penalty.

    It’s time she got everything coming her way. Mr. Doeling may well be my new hero.

  3. Kendra 05/01/2012 at 4:02 am - Reply

    Thanks for continuing to keep us updated on the trainwreck that is Jennifer McKinney.

    Was wondering why the Tuscon that Jennifer’s sister (paid them for) & drives is not listed as part of the assets able to be seized for sale. I believe it is still titled in the McKinney’s name. From what I understand they are able to keep one car, If that is the case would the vehicle with the greatest resale value be seized?

    Thanks again for such an informative & factual article.

    • Tracy Coenen 05/01/2012 at 7:21 am - Reply

      Kendra – I was wondering the same thing. Based on what I found online, the McKinneys should be able to exempt $8,800 of vehicles – – $4,400 for each spouse. Collectively, the McKinneys are claiming more than $20,000 of exemptions on 3 vehicles. I have no idea why they are doing this, or whether it is acceptable. I assume, however, that since the Hyundai Tucson was discussed in the creditors meeting, the bankruptcy trustee is aware of this issue and looking at it to determine if the McKinneys must give up one or more vehicles.

  4. Char 05/01/2012 at 8:08 am - Reply

    Tracy, Thank you for posting this information.

  5. Jill 05/01/2012 at 8:27 am - Reply

    Another good article Tracy! What just blows my mind is that Jennifer actually, publicly, wrote about all the things she was trying to hide from the trustee. How incredibly stupid! I mean, if you are hiding furniture and income, WHY OH WHY would you write about it in such ways!?

    My guess on the “why” of this is that Jennifer assumed she was smarter than the bk trustee. I think she (ignorantly) thought he wouldn’t know much about domains, affiliated links and blog sponsorships. But man oh man! What a dumb assumption that was.

  6. Lisa 05/01/2012 at 9:19 am - Reply

    Thanks for making this so much easier to understand!

  7. Pamala 05/01/2012 at 9:43 am - Reply

    I find all this very interesting and frankly I feel very bad for the kids. As this bankruptcy continues more info comes out on just how much of a scammer JM is and I’m continually amazed by those who still support her. Of course I imagine not every follower pays attention to these sites and since you can’t actively go on her blog or Facebook and post a link, I guess they continue to live in the dark.

    Not only has this woman played “poor” for the past year nearly but she’s been doing this for years and good people, who don’t know better, have given her money and gifts when she was in no need of them. And that truly makes her a horrible person.

    I’m glad to see an outside source, someone in no way affliated with any “hate” site covering this issue. Because it is an issue, and people need to know about it.

    As a general rule you have to be wary of what you read and who you give to in the blog world because there are a lot of people who can and do scam.

  8. Althea 05/01/2012 at 10:31 am - Reply

    Thank you for another well thought out and supported in truth article about the scam that is “Mckmama”.
    I find it ridiculous that she and her estranged husband think they can outsmart the government like she outsmarts her readers into funding a lavish lifestyle, which, it turns out, she couldn’t afford on nearly 150K a year. Given that the average family lives on about 1/3 of that, it is absurd she expects said average families to pay further into her facade of a life.

  9. CJ 05/01/2012 at 12:28 pm - Reply

    Given the flagrant examples of the McKinneys repeatedly lying under oath and not disclosing assets (and falsifying their income, and not paying taxes, etc.) do you think the court will discharge the bankruptcy? And, in your professional opinion, should fraud and perjury charges be pursued by the court? Do you think the McKinneys could be seeing some jail time?

    • Tracy Coenen 05/01/2012 at 2:32 pm - Reply

      CJ – I do think there is a reasonable chance that this bankruptcy case will end with the debts NOT being discharged. I think there is a fair chance of criminal charges, but I do not think they would get jail time.

  10. Melanie Whitaker 05/01/2012 at 1:15 pm - Reply

    Given the number of people that file bankruptcy every single day, I cannot believe that you take the extra time just to write articles about one person. Why not focus on a different person everyday? Seems like harassment to me…or some sick obsession…

    • Tracy Coenen 05/01/2012 at 2:00 pm - Reply

      Melanie – I’ll make you a deal. You find me someone who has flagrantly lied and concealed during their bankruptcy the way Jennifer McKinney has, and I’ll be happy to write about it. How is exposing the truth about what this woman has done deemed “harassment”? It’s not. I just hope that MckMama is held accountable for her dishonesty… finally.

    • Cricee4 05/01/2012 at 5:49 pm - Reply

      This is about a woman who consistently lies and manipulates to cheat the system and get what she wants…why WOULDN’T her readers who have given her money, resources and TIME want to know who they are really following?

    • Carmen 05/01/2012 at 6:42 pm - Reply

      Umm..the article is about people filing B/R – it’s about FRAUD in filing B/R. Wow.

  11. Caitlyn 05/01/2012 at 3:59 pm - Reply

    Given the number of people that file bankruptcy every single day, I cannot believe that you take the extra time just to write articles about one person. Why not focus on a different person everyday? Seems like harassment to me…or some sick obsession

    These are two people. One of them is a well know figure in the blogging world.

    Jennifer has repeatedly lied to her readers and sponsors. As a direct result of her actions, she has made victims of innocent people. The moment Jennifer made herself a public figure, and lied, stole and manipulated those thousands that followed her is the moment the public needed to learn of her past and current thievery.

    Her blog has been a major tool in her lies, thus her exposure is greatly warranted.

  12. Carmen 05/01/2012 at 6:44 pm - Reply

    **editing to read: the article is NOT about people filing B/R…

  13. TR 05/01/2012 at 6:54 pm - Reply

    I look at MckMama as selling a product-herself. It was found there is a major defect/lie in the product and people are talking about it. It wouldn’t be any different if it was a car seat company and the public found out that the company was lying about it to their buyers. Or not disclosing financial information to their share holders. People tend to look at this as only emotional. She is a business woman selling herself. She had a few recalls on the product, but never really fixed the problem with the product. Then to make matters even worse lied even more while under oath and the consumers aren’t buying it anymore and are not going to let this company lie to anymore people. Thus, the many people talking about this product and the appropriate authorities doing what they can to the extent they are allowed.
    Remember when you hawk yourself and your lifestyle as one thing (while making hand over fist) and then are found out……many unhappy people who feel lied to and taken advantage of. Simple.

    • Althea 05/04/2012 at 11:54 am - Reply


      This is the most brilliant summation of why I went from rabid Mckmama supporter to feeling like I’d been taken for a different ride than I paid for!

  14. CB 05/02/2012 at 9:06 pm - Reply

    Reading this kind of makes me feel sick. Public targeting of individuals by non-authorities smells too much of a mob mentality. As an attorney, I’ve seen far worse than this by legitimate “public figures” handled with much more care by media.

    • Tracy Coenen 05/02/2012 at 9:41 pm - Reply

      CB – Mob? I’m only one person. And I’m not media. I’m a forensic accountant with a blog on which I discuss cases of suspected fraud. This one seems to fit the bill nicely. And indeed, as Jennifer has chosen to broadcast her life (both the truth, and the lies) publicly, it seems fitting that the exposure of the red flags of fraud be public as well.

    • TR 05/02/2012 at 9:54 pm - Reply

      CB what is your area of practice and expertise?

      • Tracy Coenen 05/02/2012 at 10:03 pm - Reply

        TR – I’d put my money on CB not being an attorney. It was a good attempt, but not convincing enough.

  15. Riss 05/03/2012 at 1:35 pm - Reply

    I have to laugh, Melanie, as a paralegal for a bankruptcy firm. You’re right on one thing, a LOT of people file bankruptcy everyday. The difference is that most of those people don’t blatantly hide assets and commit fraud like Jennifer. That is what sets this case apart. There is a lot of digging done by lawyers and the trustee in bankruptcy cases. Most people have very legitimate reasons for filing. Bankruptcy itself is not a crime. Actually, most bankruptcy cases are pretty boring. Not only has Jennifer tried so hard to fraud people, she documents all of it online, and she still continues to fraud people even after filing bankruptcy. As someone who works in the legal world, and Tracy, as someone who works in the legal world and accounting and finance, this is a very interesting case. If anyone else wants to document their fraud and their attempt to wiggle out of it, I’m sure there would be interest in that also. Just as you think anyone who could possibly write an article about a known scammer is “obsessed,” I think anyone who has to run around the internet defending someone who frauds and lies on a daily basis is obsessed. I guess we’re on even ground.

  16. Matty 05/03/2012 at 7:28 pm - Reply

    As an attorney CB, one would think you would be sick over individuals who lie under oath and commit fraud.

  17. CB 05/04/2012 at 12:12 am - Reply

    No, sadly, it’s true. Esq eleven years now. The problem I see with this is that accusing someone of a crime or branding someone a criminal, as fraud is a crime, especially when it involves a business venture, is actionable. In many states, it’s per se defamation. Admitting you’re not claiming to be media and that this woman is not a public figure would strengthen a claim against you. But, beyond the legality of civil liability and/or possible state harassment charges (I have no idea where this woman lives, but FL and CA have pretty strong harassment statutes), it just strikes me as grown-up bullying. There are authorities charged with prosecuting fraud. Why not leave it to them? If you feel especially compelled, rat the woman out to them. But, allow them to do the prosecuting. Everyone, even accused capital murder defendants, have rights. The taking up the righteous cause business leads to Martin/Zimmerman scenarios. Just MHO. BTW, I done mostly civil lit, some insurance defense, WC from both sides. Now, I do federal immigration. My experience with defamation is limited to the bloody battles I’ve seen between lawyers and some small business work. But, my reaction to reading this is just my personal tendency to want to stick up for the little guy being piled-on. I’m sure you all have your personal indictment of her, but does anyone really deserve all this short of big bank CEOs that collapsed the economy? And even they have rights and lawyers and their day in court.

    • Tracy Coenen 05/04/2012 at 8:10 am - Reply

      CB – Another good try, but I’m still not convinced. Nonetheless, I’m going to respond to you. Read carefully. I never accused Jennifer McKinney of a crime. I never said this woman isn’t a public figure. Quite the opposite. She is, and any real attorney would recognize that in a second. Writing two articles about a woman is not harassment, something a real attorney would also recognize. All the talk about rights? A real attorney knows I haven’t done one tiny thing to Jennifer’s rights. I’ve just exposed the facts that I’ve found.

  18. Caitlyn 05/04/2012 at 6:44 pm - Reply

    The problem I see with this is that accusing someone of a crime or branding someone a criminal, as fraud is a crime…

    Have you honestly read through the two posts here? Tracy did not “brand” Jennifer a criminal. Tracy gave documented proof to the lies and ommissons on the bankruptcy documents and to those lies that Jennifer and her soon-to-be ex made under oath at the hearing. Proof. Not accusations. Proof woth transcrips and documentation. She did not call or brand Jennifer a criminal. Tracy brought to light the lies and ommissions that the Mckinneys knowingly made.

    Admitting you’re not claiming to be media and that this woman is not a public figure would strengthen a claim against you.

    Jennifer is a public figure. A very public figure which is why this information is important. Tracy never claimed that jennifer was not a public figure.

    it just strikes me as grown-up bullying.

    This statement, made by countless “supporters” still baffles me. Jennifer is a public figure. She has blogged about everything from her children’s loose teeth to her sexual life. Thousands of readers have donated money and other gifts to the Mckinney family. Jennifer has lied to her readers about her financial affairs, has essentially stolen money from the public and has lied under oath. Please, tell me how bringing light to public facts about a theif and lliar is bullying.

    There are authorities charged with prosecuting fraud. Why not leave it to them? If you feel especially compelled, rat the woman out to them. But, allow them to do the prosecuting.

    Tracy is not doing any prosecuting. She is making public…legally public facts about the lies and theft of the Mckinney’s

    Everyone, even accused capital murder defendants, have rights.

    Yes, they do. And documented proof of the ommissions on the bK paper work and the lies under oath prove that the Mckinney’s are abusing those rights.

    but does anyone really deserve all this…

    Should liars and thieves, who continue to make massive public lies on a well known blog to be revealed as liars and thieves? I should hope so.

  19. TR 05/04/2012 at 9:02 pm - Reply

    Thank you for the compliment. While I do not find myself that brilliant (but did smile at your post) it made the most sense to me in my head. I used to be a huge supporter of hers. The lies and deceit are just more than most people can stomach anymore. My husband who I would often make listen to me about her is also angry because as he says, ‘she does this all in the name of Christianity and it gives Christians a bad name.

  20. WTM 05/07/2012 at 7:11 am - Reply

    I remember someone (maybe someone from MWOP) asking about one of the items she had for sale on Craigslist. It was right around the time of her yardsale. She said that just about everything she had listed, including her very high-end highchair and stroller, had sold. Did she claim any of that money?

  21. sssg 05/25/2012 at 9:32 pm - Reply

    Have you seen the latest document posted today? Check it out, it’s a big one!!

  22. Fraud Files Blog 05/26/2012 at 6:26 am - Reply

    […] the bankruptcy goes through or not, the non-exempt assets of the McKinneys will still be taken and sold, with the proceeds going to […]

  23. whentoleaveapokertable 06/10/2012 at 9:17 am - Reply

    I would like to buy 899551 suns please for 693708

  24. Rin 06/14/2012 at 4:02 pm - Reply

    Sorry .it’s not going to be a straightforward asnewr. To start, you need to take a look at Form B22c from the bankruptcy court.This is sort of a worksheet that will eventually calculate what your disposable income will be. Your disposable income is the amount of money left over after taking your income and deducting your living expenses. The remaining will them be paid to the trustee.Getting all of the info to fill this form out is going to be very time consuming, but it’s the only way you will be able to figure it out. You can also examine the other forms and instructions if you really want to give it a shot The previous asnewr about only paying 10% is ridiculous. I have seen people get away without paying a dime, while others have had to pay nearly 75% of their debt. The new BK laws were designed so that if you make a decent amount of money, they are going to force you to pay a higher amount back. As you fill out these forms .remember that a lot of attorneys got out of doing bankruptcy work because these forms are a bit difficult and there are a million ways to make a mistake. So don’t even try to think you can do your own bankruptcy, ok?

  25. cindy 08/08/2012 at 2:39 am - Reply

    Tracy: Have you seen she has purchased another home with a contrast for deed? How will that look to the trustee in charge of investigating her? Details at mwop

  26. Fraud Files Blog 08/08/2012 at 8:18 pm - Reply

    […] not have their debts discharged in bankruptcy, as trustee Gene Doeling has been doing a fine job of uncovering their fraud. If he has anything to say about it, Jennifer and Israel McKinney will be saddled with their debts […]

  27. Fraud Files Blog 10/18/2012 at 6:00 pm - Reply

    […] on October 18th, 2012 If you’re not interested in the saga of the bankruptcy fraud allegedly committed by Jennifer McKinney (blogger “MckMama”) and her husband Israel, skip this article. In the latest turn of events, MckMama has claimed to have […]

  28. Fraud Files Blog 11/13/2012 at 12:34 pm - Reply

    […] of Jennifer McKinney (aka MckMama) and Israel McKinney (dba Kieran’s Contracting) and their alleged fraud perpetrated on the bankruptcy court. Questions have been raised about the likelihood of the McKinneys facing criminal charges, despite […]

  29. […] to have them discharged in bankruptcy. Fortunately, bankruptcy Gene Doeling caught on quickly, and accused them of attempting to defraud their creditors by filing to report tens of thousands of dollars of income per […]

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