{"id":9543,"date":"2012-04-30T21:33:25","date_gmt":"2012-05-01T02:33:25","guid":{"rendered":"http:\/\/www.sequenceinc.com\/fraudfiles\/?p=9543"},"modified":"2013-04-03T17:14:26","modified_gmt":"2013-04-03T22:14:26","slug":"mcmama-bankruptcy-update-trustee-files-motion-objecting-to-exempt-property","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/mcmama-bankruptcy-update-trustee-files-motion-objecting-to-exempt-property\/","title":{"rendered":"MckMama Bankruptcy Update: Trustee Files Motion Objecting to Exempt Property"},"content":{"rendered":"

\"\"<\/a>Whether or not you are a reader of MckMama (or mommy blogs in general), this post has good information on bankruptcy fraud.\u00a0 Last week we looked at the bankruptcy filing of Jennifer Howe Sauls McKinney and Israel McKinney<\/a>, 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<\/a>, and things may finally be catching up to her.<\/p>\n

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

Normally, certain assets are exempt in a Chapter 7 bankruptcy filing. The filer is allowed to keep basic items necessary for life<\/a>, 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.<\/p>\n

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<\/a>, and the trustee finds out about them, the trustee can take possession of them and sell them. The proceeds will go to your creditors.<\/p>\n

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<\/a>:<\/p>\n

The \u00a7 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 \u00a7 341(a) meeting, the trustee should immediately notify the United States Trustee so that the \u00a7 341(a) meeting tape may be properly secured and stored to preserve its later use in a criminal proceeding.<\/p><\/blockquote>\n

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<\/a>, MckMama claimed personal property totaling $44,425, and claimed $39,840 of that property was exempt. Following the\u00a0\u00a7 341 creditors meeting, the McKinneys filed amended information on April 12, 2012<\/a>. In that amended filing, the personal property totaled $46,300, and claimed that $43,325 was exempt.<\/p>\n

The bankruptcy trustee is now asking the court to disallow exemptions for the following assets that were undisclosed in the original filing:<\/p>\n