If the debt greatly exceeds the value of assets, transactions related to the debt should be checked.
Court documents give an overview of the debtor’s activities, and attorneys who represent individuals in a lawsuit against the debtor are likely to have valuable information about the debtor. Questions 1 and 2 require that debtors list their gross income for the year in which bankruptcy is filed and for the prior two years. Gross income reported on bankruptcy schedules is generally the same as that required on tax returns. Inspectors should also compare income a suspect received as a result of fraud with the amount of gross income disclosed to the Bankruptcy Court. A Comparative Approach to the Forms Postal Inspectors may want to do more than just read bankruptcy forms. For example, it may be worthwhile to look for any disparities between the amount of unsecured debt on Schedule F and the value of assets on Schedule B. If the debt greatly exceeds the value of assets, transactions related to the debt should be checked. Inspectors can also review the types of creditors listed on Schedule F—credit card companies often top the list of unsecured creditors. Information on credit card applications can be compared with information listed on the petition. You may also cross-reference income disclosed to the credit card company with income revealed in the Statement of Financial Affairs. Disparities would suggest fraud. Postal Inspectors need to examine the debts listed in Schedule D. If a mortgage substantially exceeds the market value of the real estate that secures it, the debtor was perhaps less than candid when applying for the loan.