Can I file for bankruptcy if I am the victim of fraud?

Can I file for bankruptcy if I am the victim of fraud?

There are numerous types of fraud that can occur. We have seen situations where another person uses your social security number to file taxes to obtain a tax refund or uses your personal information or to get a credit card in your name.

Sometimes people don’t know this has happened until the IRS notifies them that a tax return has already been filed under their social security number or they pull a credit report and notice that there are credit lines on the report that they have never taken out. In that case you would need to contact the FBI and social security office. In extreme cases, it might require you to re-issue another social security number. Other types of fraud scams occur when a party asks you to send them money or gift cards in exchange for an investment opportunity.

The same situation happens on dating websites when someone starts asking for funds. People take out credit lines of tens of thousands of dollars, then the person disappears with their money never to be heard from again.

Usually, it’s difficult to apprehend these criminals to get reimbursed which leaves no other option other than filing for bankruptcy to eliminate the debt. Fortunately, bankruptcy is an option.

However, it is recommended that you attempt to make payments to the best of your ability for several months to a year to show you made a good faith effort to pay on it prior to filing your bankruptcy case so the creditor does not object.

What is bare legal title?

What is bare legal title?

This issue comes up frequently when the person who files for bankruptcy (otherwise known as the debtor) is on the title to a vehicle that someone else drives and makes the payments on.

This happens oftentimes when a parent keeps the vehicle in titled in their name instead of their child’s name but the child drives it. It also happens when the debtor puts the vehicle and loan in their name for a family member who does not have good credit. If there is equity in the vehicle (the value of the vehicle exceeds what you own on it) and that amount is over the allowed bankruptcy exemptions you would need to pay the trustee the difference.

However, if you have not paid anything towards the vehicle or any gas or paid for any maintenance then there is an exception you might qualify for called bare legal title which allows you not to have to pay anything to the trustee under those circumstances.

You may have to provide proof that the other person has been the one making the payments. Bare legal title applies to personal property and cars. However, you cannot have bare legal title to real property.

If you are on the deed of any real estate, whether you live there or not, or whether you have paid for it or not, that cannot be considered bare legal title. At that point, we would need to evaluate if the property can be exempt as your homestead or not.

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