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rowan · 04-17-2009, 10:08 PM

Interesting read... some parts bolded for those with short attention spans...

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Much of the cash obtained by the Warrens was used to acquire assets that they then apparently undervalued so that they would come within the statutory limits for exempt property. Utah law permits a debtor to claim an exemption for a motor vehicle, but only up to $2,500. See Utah Code Ann. § 78-23-8(3). The Warrens' May 7, 2004, bankruptcy schedule listed two vehicles (one for each of them) as exempt, one valued at $1,000 and the other at $2,500. Yet they purchased the "$1,000" vehicle on March 22 for $1,100 and spent $2,050.80 on April 9 for vehicle repairs and improvements. Likewise, they bought the "$2,500" vehicle on March 25 for $2,700 and between March 30 and April 4 spent an additional $2,776.65 for repairs and improvements. Thus, they valued the two vehicles at a total of $3,500 despite having spent $8,600 on them in the prior seven weeks. It is also worth noting that the Warrens used some of their accumulated cash to purchase items protected from creditors by Utah's uncapped exemption for "provisions sufficient for 12 months actually provided for individual and family use." Id. § 78-23-5(1)(a)(viii). During the month before filing their bankruptcy petition they spent $3,000on groceries, $2,000 on clothes, and $2,000 on a mattress.

The Warrens' apparent undervaluing of assets to keep them under the statutory caps extended to assets acquired before the Warrens met with bankruptcy counsel. For example, Utah Code Ann. § 78-23-8(2) provides a $3,500 exemption for "implements, professional books, or tools of [the] trade." Under this provision the Warrens claimed as exempt 14 computers, which they valued at $200 in total despite having paid $31,000 for the used computers seven months earlier. Section 78-23-8(1)(d) provides a $500 exemption for "heirlooms or other items of particular sentimental value." Under this exemption they claimed "wedding rings" valued at $10, a pearl necklace valued at $2.00, a gold ring valued at $3.00, a chair from Spain valued at $0.00, and five paintings valued at a total of $10.00. Section 78-23-8(1)(a) provides a $500 exemption for "sofas, chairs, and related furnishings reasonably necessary for one household." Under this exemption the Warrens claimed over 30 items, including 6 TVs valued at $50 total, china valued at $1.00, crystal valued at $1.00, a stereo valued at $5.00, and a treadmill and stairmaster valued at $20.00 total.As a result, the Warrens' only nonexempt tangible property consisted of sports, camping, and yard equipment; household tools; a third automobile; and a few pieces of furniture.

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It wasn't just their customers they were scamming...

04-17-2009, 10:08 PM
rowan Too lazy to set a custom title Join Date: Mar 2002 Location: Australia Posts: 17,393	Interesting read... some parts bolded for those with short attention spans... ============ Much of the cash obtained by the Warrens was used to acquire assets that they then apparently undervalued so that they would come within the statutory limits for exempt property. Utah law permits a debtor to claim an exemption for a motor vehicle, but only up to $2,500. See Utah Code Ann. § 78-23-8(3). The Warrens' May 7, 2004, bankruptcy schedule listed two vehicles (one for each of them) as exempt, one valued at $1,000 and the other at $2,500. Yet they purchased the "$1,000" vehicle on March 22 for $1,100 and spent $2,050.80 on April 9 for vehicle repairs and improvements. Likewise, they bought the "$2,500" vehicle on March 25 for $2,700 and between March 30 and April 4 spent an additional $2,776.65 for repairs and improvements. Thus, they valued the two vehicles at a total of $3,500 despite having spent $8,600 on them in the prior seven weeks. It is also worth noting that the Warrens used some of their accumulated cash to purchase items protected from creditors by Utah's uncapped exemption for "provisions sufficient for 12 months actually provided for individual and family use." Id. § 78-23-5(1)(a)(viii). During the month before filing their bankruptcy petition they spent $3,000on groceries, $2,000 on clothes, and $2,000 on a mattress. The Warrens' apparent undervaluing of assets to keep them under the statutory caps extended to assets acquired before the Warrens met with bankruptcy counsel. For example, Utah Code Ann. § 78-23-8(2) provides a $3,500 exemption for "implements, professional books, or tools of [the] trade." Under this provision the Warrens claimed as exempt 14 computers, which they valued at $200 in total despite having paid $31,000 for the used computers seven months earlier. Section 78-23-8(1)(d) provides a $500 exemption for "heirlooms or other items of particular sentimental value." Under this exemption they claimed "wedding rings" valued at $10, a pearl necklace valued at $2.00, a gold ring valued at $3.00, a chair from Spain valued at $0.00, and five paintings valued at a total of $10.00. Section 78-23-8(1)(a) provides a $500 exemption for "sofas, chairs, and related furnishings reasonably necessary for one household." Under this exemption the Warrens claimed over 30 items, including 6 TVs valued at $50 total, china valued at $1.00, crystal valued at $1.00, a stereo valued at $5.00, and a treadmill and stairmaster valued at $20.00 total.As a result, the Warrens' only nonexempt tangible property consisted of sports, camping, and yard equipment; household tools; a third automobile; and a few pieces of furniture. =============== It wasn't just their customers they were scamming...