Inspectors may find legal papers filed by the debtor, depositions of the debtor, and perhaps a debtor’s admissions.
An Inspector’s suspicions may be confirmed if the debtor lists a lawsuit by the mortgage company in the Statement of Financial Affairs. If mortgage debts were taken out near the time of bankruptcy, it would be worthwhile to review a debtor’s gross income in the Statement of Financial Affairs. Debtors with minimal income are unlikely to qualify for a substantial mortgage loan. Meeting of Creditors A “meeting of creditors” is held for every bankruptcy. It is similar to a deposition, but more abbreviated. At the meeting, debtors testify under oath about their financial background. The examination supplements, and may clarify, questions and answers in the bankruptcy forms. All information is recorded, and the recording is available to Postal Inspectors by contacting a local Office of the U.S. Trustee. Visit www.usdoj.gov/ust for a list of Trustee offices. Adversary Actions: Objections to Discharge Creditors or governments may challenge a debtor’s ability to discharge a debt. The challenge may come in the form of a lawsuit, known as an “adversary proceeding,” in Bankruptcy Court. There are many legal grounds to object to the discharge of a debt, but the objection most frequently used is that the debtor committed fraud. Adversary proceedings are similar to other lawsuits. Inspectors may find legal papers filed by the debtor, depositions of the debtor, and perhaps a debtor’s admissions. It may also include court hearings at which the debtor testified. The legal order concluding the adversary proceeding is a key document.
