Got fraud? If you find yourself being accused of a fraud on the bankruptcy court like Jennifer MckMama McKinney (i.e. falsified, misleading, destroying, manipulating, etc.), what can you do? If you could turn back the hands of time, I would tell you to be honest and fully disclose everything in your bankruptcy filing.

But once the wheels of fraud are in motion, it’s awfully hard to stop them.

One of the techniques used by debtors trying to save their skin after red flags of fraud have been uncovered by the bankruptcy trustee is an attempt to dismiss the bankruptcy case. This move makes little difference in a case of suspected fraud. The bankruptcy is likely going to be denied anyway, so asking to have the bankruptcy dismissed does not get the debtor ahead. And a debtor can’t just automatically get a bankruptcy dismissed. The judge decides whether the bankruptcy can be dismissed.

In a case involving fraud, the court will likely not approve the dismissal. First, the court will want to sell assets that already belong to the bankruptcy estate and give the proceeds to creditors. Second, the court will prefer to have the discharge denied  so the debts can never be discharged in bankruptcy in the future.

Maybe the dismissal will stop the bankruptcy trustee from continuing to look into the suspected fraud? No. If the trustee has already uncovered substantial evidence pointing to fraud, don’t expect that he’s going to stop looking into the matter simply because you’re trying to make the bankruptcy case go away.

If you have found yourself lying about your income and your assets in your bankruptcy, don’t think your problems are over once you’re told your debts will not be discharged (ever!) and you will spend the rest of your life paying them off. Your next visit may be from an IRS auditor (or maybe even a criminal investigator!), who will want to thoroughly audit your books and records to see if you have committed tax fraud.

Long story short: Once you’ve attempted to deceive and defraud in the bankruptcy process, there is little hope for getting yourself out of trouble. When you attempt to commit fraud in the United States Bankruptcy Court, it seems like the fun never stops!!!


  1. Char 05/31/2012 at 11:00 pm - Reply

    Tracy- did you see her comments during her blogfrog live chat?

    It’s over, she’s going to pay back her debts, it’s all good.

    I’m glad she’s living in a fairy tale. I really wish she would wake the f*&k up for those kids sake.

    • Tracy Coenen 06/01/2012 at 6:50 am - Reply

      Char – You don’t say???? 🙂

    • Davida 06/01/2012 at 9:10 am - Reply

      OT but Char, how is your heart? People on MWOP were worried about you last night.

      • Char 06/01/2012 at 11:21 am - Reply

        Although I don’t comment on MWOP, I do read there. I don’t click on Mckmama, I love the Trustee.

        My heart is just fine, even though Mckmama thinks otherwise.

      • Char 06/01/2012 at 11:22 am - Reply

        I replied below, sorry I did it in the wrong place.

  2. Cindy 05/31/2012 at 11:42 pm - Reply

    Since the trustee has uncovered such a huge discrepancy of her income she reported and what he actually found will that information be forwarded to the IRS? Do they communicate with each other?

    • Tracy Coenen 06/01/2012 at 6:51 am - Reply

      Cindy – There is no guarantee that the information would be forwarded to the IRS. But I expect that it will be.

  3. Carly 06/01/2012 at 12:37 am - Reply

    Her comments on her live chat tonight seem to paint a pretty rosy picture!

    “Nope … we’re gonna pay back our debts the old fashioned way. 🙂 He chose not to let them be discharged. You’d like I’d be sad, but I am so the opposite. Similar things have been happening a lot lately. I love when God makes our paths CLEAR. So much easier to follow Him.”

    “Yeah, it’s not being held up … it’s over! 🙂 We’re paying back our debts the old fashioned way, it seems! It’s all good…it’ll put hair on my chest. No, wait. Something. :)”

    “… it’s just as if we didn’t file for bankruptcy now. We work out/continue on the payment plans. Which is more complicated by the fact that Israel and I are separating. Oh well.”

    Tracy am I right in assuming that she is just straight-up lying about this?

    • Tracy Coenen 06/01/2012 at 6:54 am - Reply

      Carly – I expected that her debts would not be discharged and she’d have to pay them back “the old fashioned way”… i.e. BY ACTUALLY PAYING THEM! So that part is truthful.

      But it’s not really as if they didn’t file bankruptcy, though. They’re in a whole heap of trouble that isn’t going to go away simply because Jen is a very special blogger who says it should.

      Pay back debts? Yes. As if they never filed bankruptcy? No. Happy about it? Most certainly not.

  4. C3 06/01/2012 at 7:04 am - Reply

    Except, I hardly think she’s actually going to pay back debts, except for the IRS ones.

    It will depend on the laws in the states where the debts are owed. We have people that owe us money in RI, for example. Tenants that stiffed us rent, damaged apartments, etc. We have judgements and are legally owed the money. But we haven’t seen a red cent, and likely never will.

    It is extremely difficult to legally garnish somebody’s wages in RI. And you cannot send a bounty hunter or in any other way harass or intimidate them into paying.

    Given that Jennifer and Israel had a judgement for 5k against them, and they had that judgement for quite some time and still chose to not pay, I’d say it’s pretty likely they simply won’t pay.

    At some point, it becomes too expensive for the plaintiff (us) to keep dragging their rear ends back to court. Not like they ever showed up for court anyways!

    In our situation, our landlord/tenant attorney wrote into our rental agreements that tenants would be liable for our legal fees. But when it came down to actually applying that, he flat-out told us that it’s very rare for a judge to actually award a landlord the legal fees, unless the tenant had been particularly egregious.

    Personally, I think Jennifer and Israel have been particularly egregious. 55k of somebody’s INCOME! Yeah, that’s egregious. But will they ever pay on it? I doubt it.

    Eventually, the statute of limitations will pass, and they will be off the hook.

    • Tracy Coenen 06/01/2012 at 7:09 am - Reply

      C3 – The creditors will have one very helpful tool: they can garnish wages and bank accounts. She will never be able to own a home. The creditors could take other valuable assets.

      There are ways to chase her, and she owes enough that it might be worth it to the creditors. Or they might settle with her, which will require her to pay a nice chunk.

      I haven’t lost faith yet!

  5. Carly 06/01/2012 at 7:46 am - Reply

    Tracy thanks for responding.

    Would she have already been notified “officially” that the bankruptcy has been denied without any official documents appearing on the public record?

    • Tracy Coenen 06/01/2012 at 7:48 am - Reply

      Carly – I doubt it. Her lawyer just probably told her how screwed she is, so she knows the papers are coming eventually. I suspect she’s saying this now so she can begin her big “moving on” period, and when it does become publicly available, she can say “oh that… we already talked about that…. look the other way!”

  6. Carly 06/01/2012 at 7:53 am - Reply

    That’s what I thought. Thanks for all your work at making this more understandable for us. I am amazed and frankly disturbed about this whole thing… just can’t seem to look away, though.

  7. Tracy Coenen 06/01/2012 at 8:25 am - Reply

    MckMama: Lxxx, because some people contacted my bankruptcy trustee trying to plant the idea in his head that my husband and I “hid” money before declaring bankruptcy so that it would look like we didn’t have as much and would be able to go through with bankruptcy.

    Technically, this is true. Jennifer McKinney didn’t “hide” money. She ran it through her bank account plain as day, thinking the trustee would never ask to see the records.

    So Jennifer didn’t actually hide money. She failed to disclose it in the bankruptcy.

    Nor did Jennifer “hide” other assets. She simply sold them off (or gave them away?) and didn’t disclose that as required under the bankruptcy law.

    And apparently the trustee believes the act of non-disclosure is worthy of words like “manipulated, destroyed, concealed, falsified, false, and intentionally.”

  8. Heather 06/01/2012 at 8:27 am - Reply

    What do you think about how she’s blaming MWOP for setting up fake PayPal accounts, and tricking the trustee into thinking she did not disclose all her income? Can you even set up a fake Paypal account? How do you think that will play out?

    • Tracy Coenen 06/01/2012 at 8:29 am - Reply

      Heather – I think it’s laughable. MWOP may have pointed the trustee in the right direction, but he did the investigation and came to his conclusions based on FACTS and DOCUMENTS. Jennifer failed to disclose what she was required to disclose by law. MWOP couldn’t have done that for her. She did it all by herself. With the help of Israel, of course.

  9. Kathy Focht 06/01/2012 at 8:28 am - Reply

    Would it make any sense to send the trustee excerpts from the chat last night to enlighten him further regarding her se la vie attitude about the fraud she committed and blaming others for “opening fake paypal accounts” (SMH on that one) she must lay awake at night coming up with these whoppers.

    • Tracy Coenen 06/01/2012 at 8:30 am - Reply

      Kathy – I don’t think it’s necessary. He knows what he is doing, and he can use the court system to subpoena records from Paypal, if necessary. Since he has shown he knows about at least one undisclosed Paypal account, I think it is likely that he will follow up on the issue through the proper legal channels, and doesn’t need any more information to do so.

  10. Pamala 06/01/2012 at 9:58 am - Reply

    Yeah I imagine that the trustee would have figure all this out without the help of MWOP really.

    It actually amazes me that Jen didn’t think the man would at the very least, google her.

    MWOP technically didn’t need to do anything to notify this man of her paypal account, the one she does use and didn’t tell him about. She wrote about it on her blog.

    In the end she is trying to place blame on MWOP and trying to pull a fast one on her readers. If they were smart they’d realize what she said, that no one put assets into those “fake” accounts rather they just made him look deeper which got her found out.

    So she’s saying that if MWOP hadn’t done anything she would have been able to pull a fast one on the court.

    Seriously the fact that people believe that it’s okay to hide nearly 100K in assets from the court, is amazing.

    It shows just who her readers are and frankly exactly who she is.

  11. annon 06/01/2012 at 10:10 am - Reply

    Dear Tracy,
    I was one of the ‘names’ that MckMama publicly called out on her facebook, and then MWOP. The problem on her end is, I only ‘liked’ a couple of comments on her facebook, that weren’t in agreement with her. That is how she got my name. I’m not a member of MWOP, so I don’t have any bad things i’ve said there. She took my good name and exposed it in the same paragraph as — “friends” who have also been involved with the interference with business, defamation and slander regarding me are being brought to the light, too. And the ones who created fake PayPal accounts in my name so that you and your friends’ “claims” that I “lied to” our trustee and have “hidden money” and committed “fraud” would be more likely to seem actually true are going to be held responsible for their actions.–
    But I’ve never done that, and there is proof of that. Am I actually the one with a case against HER? Thank-you for taking the time to respond.

    • Tracy Coenen 06/01/2012 at 11:14 am - Reply

      annon – I am not sure. Anyone can file a lawsuit against anyone else at any time. Whether you’d win? I don’t know.

  12. Davida 06/01/2012 at 2:01 pm - Reply

    Tracy, can they take her blog if it’s her source of income? Or is that something they have to leave her so she can continue to make money to theoretically pay back her bills?

    Related to this somewhat, if she had had an LLC for her blogging would she be protected in any way? (I’m asking as someone who is self-employed although NOT a blogger or a fraudster or declaring bankruptcy but still, I’m curious!)

    • Tracy Coenen 06/01/2012 at 2:04 pm - Reply

      Davida – The trustee will be taking the domain name, but it is unclear if he will be taking the content of the site too. It appears to me that he CAN take both, since they are assets that were undisclosed in the bankruptcy filing.

      If you don’t disclose assets, and the trustee finds them, he can take them. It’s really not his problem if those assets are used to earn income. They should have been disclosed, so the penalty is that they get taken away.

      I don’t think an LLC would protect her, since she would be the owner of the LLC, and her ownership interest could be taken if that hadn’t been disclosed.

      Speaking of seizing assets, I wonder if the trustee is going to take the camera equipment Jennifer didn’t disclose?

      • Anonymous 06/01/2012 at 2:10 pm - Reply


        If they take ownership of the blog content, will they also own any unpublished posts? She has stated on numerous occasions that she has written posts but not published them. Can we assume that it would be published content only?

        • Tracy Coenen 06/01/2012 at 2:24 pm - Reply

          Anonymous – For the tax debts, they will be responsible joint and severally, meaning neither is off the hook until the IRS is paid in full. For the remaining debts, it may depend in part on what happens in the divorce.

          I am not sure about the unpublished posts.

          • C 06/01/2012 at 8:12 pm

            Tracy, is that the case even though the temporary order for their separation divides their debt with Jennifer being shown as responsible for their federal and state taxes?

          • Tracy Coenen 06/01/2012 at 8:32 pm

            C – Yes. Jennifer and Israel can decide whatever they want about who is going to be paying the debt now or in the future. But the IRS isn’t going to let either of them off the hook legally until the bill is paid in full.

  13. Anonymous 06/01/2012 at 2:07 pm - Reply

    A good question was brought up…

    If the discharge gets denied, and their divorce goes through, will they both be equally responsible for total the debt? Will they individually be responsible for the debt that is in their own name? Most of the medical bills listed were in her husband’s name and I was curious how this would affect the divorce settlement.

    Thanks! Love the posts and you rock!

  14. Donna Flynn 07/24/2013 at 6:33 pm - Reply

    I desperately need help. I was scammed out of my life’s savings. The con artist fled Mississippi and filed bankruptcy in Texas. She is hiding her assets, not reporting rental income (her spouse has rental property, she would not have passed the means test had it been reported) and I am confident that she emptied her bank accounts immediately prior to filing the bankruptcy. I am disabled, on a fixed income and have had to represent myself. Could not get the Trustee on board to investigate her. My subpoenas just got quashed because I am not an attorney. She has lied to the Court over and over regarding evidence but no one seems to care. I feel so stupid and beat down for allowing this to happen. I don’t think I am strong enough to make it through this if she gets away with it. I need HELP. Please let me know if you or anybody can help. She is the most evil, vile person I have ever met.
    Thank you,

  15. Tracy Coenen 07/27/2013 at 6:48 pm - Reply

    Donna – What you need is an attorney. Check if there is a legal aid society or something similar near you. They may be able to help you for free.

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