Archives for November 2015

Bankruptcy Fraud in the News

Pittsburg Real Estate Agent Charged with Bankruptcy Fraud

The federal bankruptcy laws were enacted to provide individuals with a second chance when circumstances put them on hard times. But the benefits afforded by the bankruptcy laws require honesty and full disclosure by petitioners. The failure to advise the bankruptcy court or trustee of assets, income or resources constitutes fraud, and can land you in a lot of hot water, as is being discovered by a real estate agent from the Pittsburgh area.

Gregory Makozy, the former owner of A1 Mortgage in Cranberry, an upscale suburb of Pittsburgh, was arrested by federal agents in Florida in August, charged with bankruptcy fraud and with making false statements in a federal bankruptcy proceeding. Makozy, who filed for bankruptcy in Florida in 2013, is accused of attempting to shield assets from creditors and the bankruptcy court by transferring them to his wife’s name and then selling them. Prosecutors say that his wife, Maria, is not charged with bankruptcy fraud, but has been arrested on embezzlement charges in a separate incident.

Here are some of the ways federal prosecutors allege that Makozy engaged in bankruptcy fraud:

  • Makozy sold his home in Butler County, Pennsylvania, in 2013, for more than a million dollars, transferred half of the proceeds to a corporate account in Florida, and then failed to report the holdings in the corporate account in his bankruptcy filing
  • Makozy owned an Aston Martin that he retitled in his wife’s name before the bankruptcy filing. After submitting his bankruptcy petition, he sold the car for $54,000.
  • Makozy made a gift of real property to his son, but then sold the property after building a house on it, netting $125,000 that was not reported on the bankruptcy filing

We always counsel clients to avoid this situation. Too often, non-disclosure makes the situation much worse. For example, fraud or non-disclosure can result not just in criminal conviction, but also the loss of property AND the permanent loss of any right to discharge debts.

Contact Our Office

At Neuner & Ventura, LLP, we work hard to alleviate the stress, anxiety and confusion that come with a potential bankruptcy filing. We offer a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. For an appointment, call us at 856-596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Representing clients across South Jersey

Eligibility for Chapter 7 Bankruptcy in New Jersey

Cutting Credit CardIf you are struggling to meet your financial obligations, you may have considered a bankruptcy filing as a way to get a fresh start. If you have paid attention to bankruptcy issues in the news over the last few years, you may be aware that some of the eligibility rules have changed. Are those eligibility rules the same across the country or are they different in New Jersey. As will most things, the answer is both yes and no.

The Means Test for Filing a Chapter 7 Liquidation Proceeding

Under the 2005 revisions to the federal bankruptcy laws, to qualify to permanently discharge debts under a Chapter 7 petition, you must submit to what is known as a “means test.” The means test applies a formula based on your gross income for the preceding 6 months and other financial information about you to determine whether under that formula you are presumed to have sufficient net disposable income to repay your creditors over a three-to-five year period. If the numbers demonstrate that you have that capability, you won’t be able to discharge debts in Chapter 7, but will have to seek protection under Chapter 13.

While the requirement that you submit to a means test applies across the board (in all states and territories of the United States), the actual income and expense numbers plugged into the formula varies from state to state and county to county. Here’s how it works in New Jersey:

  • The first part of the New Jersey means test compares your entire household’s gross income for the past six months against the New Jersey median income for a household your size, as established using US Census Bureau numbers. The median is the point at which half the households earn more and half earn less. If your household gross income is below the median, you automatically qualify to discharge debts in Chapter 7. To determine your income, you average all income besides Social Security coming into your household during the last six months. This includes regular contributions by family members to household expenses.
  • If your income exceeds the median, you must provide additional information detailing your payroll deductions and household expenses and must qualify using a complex formula that limits what types of expenses you can deduct from your gross income. Not all expenses are allowable.

Certain people are given and exemption from the means test. If your debts are primarily business related or if you are a disabled veteran and incurred your debt while on active duty, you may be able to file a Chapter 7 without submitting to a means test.

Here is the important point: timing is everything! We have seen people who lost their qualification because they waited too long to file. If you are thinking about a possible bankruptcy, get a detailed review by a qualified attorney.

Contact Neuner & Ventura, LLP

To schedule an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request. There is no cost or obligation for your first meeting.

Representing Clients across South Jersey

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