Great news out of the United States Bankruptcy Court in Minnesota, where Jennifer McKinney (blogger MckMama) and Israel McKinney filed for bankruptcy nearly a year ago. After trustee Gene Doeling ferreted out Jennifer’s financial shenanigans, he filed a complaint with the bankruptcy court objecting to the discharge of the debts. Mr. Doeling alleged that the McKinneys engaged in manipulation, destruction, concealment, and falsification of information in the bankruptcy process.
Yesterday a signed Application for Approval of Waiver of Discharge was filed with the court. This means that Jennifer and Israel McKinney have agreed that their debts should not be discharged in bankruptcy.
Now don’t fool yourself into thinking that this was some benevolent or truly voluntary act on the part of the McKinneys. (I’m talking to you, Sheeple!)Â What this means is that Gene Doeling had the goods on Jennifer and Israel, and their bankruptcy was almost certainly going to be denied anyway. By signing this waiver of discharge, MckMama and Israel simply get the pain over with immediately and save themselves a bunch of attorneys fees that they would have incurred to fight Mr. Doeling.
For those uninitiated, this post details many of the financial untruths that Jennifer told to the bankruptcy court (as well as her loyal blog readers).
What happens now?
- The debts are not discharged via bankruptcy
- The McKinneys will have to pay their creditors
- Assets that are not exempt (including the ones that the McKinneys claimed as exempt but Mr. Doeling objected to on various grounds) will likely be taken and sold, with the proceeds going to creditors
- The case Mr. Doeling filed objecting to the discharge may be dismissed if it is deemed unnecessary (but as of now the case is still open)
- None of the debts included in the bankruptcy filing can ever be discharged in bankruptcy
- The McKinneys cannot file bankruptcy again for one year after this waiver is approved by the court (and again, even if they file bankruptcy in the future, the debts in this case cannot be discharged)
Let the season of repaying the creditors begin! The creditors can and should garnish Israel’s wages, garnish Jennifer’s 1099 income from Xyngular. The creditors should also swipe money out of any and all bank accounts the McKinneys have.
My sincerest thanks to Gene Doeling for his diligent work on this case. Jennifer McKinney was so sure she was going to ditch out of her $725,000 of debt by pretending to be poor and otherwise concealing assets and income from the bankruptcy court. I cannot thank you enough, Mr. Doeling, for doing such a wonderful job holding the McKinneys accountable for their actions.
[…] To read the article published today at Fraud Files click here:Â http://www.sequenceinc.com/fraudfiles/2012/10/mckinney-bankruptcy-denied-mckmama-must-pay-creditors/ […]
And I thought my day couldn’t get any better!
Gene Doeling, you are the man!
Tracy, what do you think will happen now?
I’m going to venture to guess that the McKinney’s only agreed to this to lessen the chance that the Feds would press criminal charges. That said, I hope they (the Feds) still do anyway.
I believe the assets are still going to be taken and sold. This is just one piece of wrapping up the bankruptcy. I do agree that the McKinneys probably agreed to this in the hope that criminal charges would not be forthcoming. Obviously, I hope that they are charged. A crime was committed, and agreeing to drop the bankruptcy does not undo that crime. I think it is important to make an example of them. The bankruptcy court relies on the honesty of people. Not charging the McKinneys would only send a signal that it’s okay to lie and take your chances, because even if you’re caught, you’re unlikely to be charged criminally.
Does this mean Mr. Doeling is not going to sell her blog or any property?
I hope criminal charges are brought against them and that they both end up doing jail time.
I’m tired of the argument that the kids need their parents around. After her latest IG pictures its obvious JM is putting her children in danger. IMO, they would be better off with the grandparents.
BAM!
So what does that mean for the contract for deed? That is a sizable part of her debt. Will the bank just take possession of the house (as it already has done) and charge off the rest? Will she face any consequences for the that? Also, won’t most of the medical debt not be a big deal? Isn’t it true that as long as you are paying anything on it (even small payments) they will not normally come after you? The two Target credit cards might come after her, but other than those isn’t the IRS debt the only problem (and supposedly before their payments were only $100 a month on their “payment plan”)? I am thinking she is going to be able to make very minimal payments and get out of this pretty easily. Sure, she can’t aquire any new debts, but otherwise I don’t see this hurting her very much. I am missing something here?
The bank will sell the house, and any shortage will be owed by the McKinneys. All of the debts are a big deal. For one, their credit is ruined for a long, long time. Second, the creditors can (and should!) get judgments for what they’re owed and then do the garnishment thing. They will know the outcome of the bankruptcy, so they should know better than to trust her to make payments. She has been dishonest for years, and that’s not about to change. They’re better off getting their judgment and garnishing her earnings. The is very, very bad for the McKinneys. And very, very good for consumers everywhere.
will the difference owed and the difference recovered in selling thei house be considered as non-taxable? isn’t their a mortatium on taxing that money that runs out the end of this year? if so, theirs was last year and could be included in that statute, making them not responsible for the amount owed.
For clarification, when you say, “The bank will sell the house,” are you talking about the Becker MckMansion listed on the BK papers or her current CFD house? Is she in any danger of losing her current, craptacular house?
I mean the Becker house. I do not believe that the current contract for deed will be affected by this. Unless of course, the creditors go all out with garnishing and Jennifer has no money to pay her current contract. That would be a shame. đ
Perhaps someone has already mentioned this, but I find it so funny that her husband decides to come back during this time. Almost like the whole separation was BS. I wonder if they were trying to tie up any money they were making, showing them paying for two separate households.
I suspect they’re both just bumbling idiots who change their minds as the wind blows. They truly deserve each other.
When will we know if there are criminal charges brought against them?
I have no idea. It’s just a waiting game at this point.
That dead snake sure busted her broke arse.
Gene Doeling is the MAN!!!
Could not have woken to better news today.
Thank you too Tracy for your hard work in keeping us informed in lay terms.
Was there any mention of fraud charges being brought?
If criminal or fraud charges were to be brought against the MckIdiots, who would be the person/agency/whatever in charge of that?
If’s Xyngular’s accounting is on the up and up the IRS will know about her Xyngular income via the 1099 and bye bye most of that until they are paid up. I hope someone also contacts her other creditors who might not know about her Xyngular income or where she banks and lets them know about Xyngular. If the Trustee knows about the Xyngular income, can he tell their creditors? If not, I hope someone contacts each creditor directly and spills the beans on Xyngular. I’ve got to imagine that nowadays debt recovery organizations use social media to gather intel on deadbeats so if they find her FB page they’ll certainly know about the income from Xyngular.
I’m unsure what information Mr. Doeling is able to share with the creditors. Hopefully the creditors are smart enough to use Google. đ
Wow…just wow. yet so fitting. I would LOVE to see criminal charges against them.
I have a feeling that Jennifer is playing a big game and making sure there isn’t much official income from Xyng. I think she is buying the stuff wholesale and then selling it under the table. Why else does she show big huge amounts of it in pics and tell people rather than trying to go through the website and figure out how to get it cheapest, just email her(and don’t forget that pesky dot!)? I think she is hiding a lot of $$ that way. She is a slimy individual and I’m sure she’s found a way to get through this without having to give up her lifestyle.
I would love it if Jennifer was planning on cheating on her taxes like this. She is already on the IRS’s radar by being so far behind on her taxes. They’re already studying her. And after Gene reports to the IRS, they’ll look even closer.
I would love for Jennifer to sell things and not report those sales to the IRS. Because the IRS can go straight to Xyngular and find out exactly how much Jennifer has purchased from the company. They are going to assume that she sold most of that, and compare their calculated figures with what Jennifer reported as income.
And when they come up short, they will bring the hammer down on her. Hopefully criminally.
Jennifer isn’t as clever as she thinks. The IRS will not give her the benefit of the doubt. Not by a long shot. And she is going to be in even more trouble.
How fun will that be to watch?
I would so love to see the IRS slap her hard. Surely Xyngular have to keep accurate records regarding their distributors etc. for their own accounting purposes? All it would take then would be for the IRS to undertake an audit & match up her name with their records, so much easier with records being computerised.
I am hoping Mr. Doeling is able to pass on any & all of the information he has…and he has a lot, a lot. I live in Australia and the local IRS equivalent, the Australian Tax Office are able to exchange & crossmatch any information from employers, Centrelink (Social Security) & financial institiutions. Does it happen in the US too? I imagine it would be in everyone’s best interests if it did.
Yes, Kerrie, a lot of financial information is automatically forwarded to the IRS. The information the IRS doesn’t have (like how much product MckMama purchased from Xyngular) is easy to get via a subpoena.
She’s already figured out how to circumvent taxes on the Xyng money. She’s buying the products herself and doing direct sales with her ”clients” rather than directing them to her Xyng website. Once a cheat, always a cheat.
After a couple of days of really crappy news, this is a bright point!!! If only her sheeple were seeing this and realizing that their demi-God is a fraud, cheat, liar, thief and all around bad person. I hope that criminal charges will be pursued, a message really needs to be sent. So, if she sets up another blog (which I believe is just a matter of time), can the courts take any money earned from it and use it to pay all those people she screwed over?
Yes. Suppose she has Google ads on her new site. A creditor with a judgment against her (won’t be hard to get) can garnish her earnings from Google.
And here’s the best part: If her earnings were regular wages, there is a limit to how much can be garnished. (25% is a typical figure.) When it’s independent contractor money, there is no limit, and the creditor can garnish it all.
Tracy: Just a big THANK YOU for following this story and breaking things down. Thank you Gene Doeling for seeing Jennifer McKinney for the true cheat she is. Anyone want to send Gene an edible arrangement or something? LOL..
thanks again Tracy! NICE WORK.
Tracy, I suppose I could look it up but do you know if the IRS has whistleblower program where if you report someone you suspect of tax fraud that if you are right and the IRS recovers $’s due to the information you provided, you get a take of the $’s? Just wondering….
Yes.
http://www.irs.gov/uac/Whistleblower—Informant-Award
Hi Tracy – There’s a new document on PACER. Apparently a trial date of 11/13 has been set. Can you elaborate a little more as to what this trial entails, etc? Thanks!
The original bankruptcy case has been concluded as the waiver of discharge has been approve. The McKinneys must pay their debts and don’t get to ditch out of any of them via bankruptcy court.
The separate case – – in which the trustee made his allegations of hiding assets and income – – is still open. I suspect that there may be a settlement coming in that case as well, but it appears that a trial has been set because the case has to proceed even if there are ongoing settlement negotiations. The document regarding the trial is simply laying out some of the ground rules of the evidence. Both sides are entitled to see the evidence the other side is intending to present at trial, and they will argue about them before trial if necessary.
How is it possible to have a “settlement” when an individual is charged with fraud? Particularly when the trustee has ample evidence of that misdoing. To layperson me, a settlement implies less than a strict innocent or guilty decision — more like “we’ll overlook some of the things you did/said and you will (fill in the blank) to meet your obligations in the matter”. What, exactly, are the types of discussions held in settlement proceedings and/or what types of decisions are made?
We’re all learning a lot here, thanks!
There are currently two separate cases:
1. The original bankruptcy filing – This has been settled with the McKinneys agreeing to go away and not being able to ever file for bankruptcy on those debts again.
2. The adverse proceeding in which Mr. Doeling is objecting to certain assets being exempt in the original case, and he is asking the court to allow him to take and sell assets. This is the case that is still open and set for trial. This one could also be settled, with the McKinneys giving up certain assets and not fighting him.
There could be a THIRD case, and that would be a criminal case against the McKinneys. We have no idea yet if that kind of case will be filed, or what the likelihood of it being filed is. A criminal case could be settled too, with the McKinneys agreeing to plead guilty to certain charges in exchange for some charges being dismissed and/or the potential penalties (such as prison time or probation) being limited.
This is far from over. What a great SEASON to be in!
If the bank pursues the McKinneys for the difference between what they owed and what the house is sold for, there is no tax impact. If the bank were to FORGIVE that debt, it may or may not be taxable.
Debt forgiveness on mortgages has traditionally been taxable, but during 2007 through 2012, there were situations in which it was NOT taxable. See here:
http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-
It looks like Jennifer is planning on taking her Xyngular sponsored trip to Dubai the same week she’s supposed to make her next court appearance. What could be the consequences if she does go and misses her court date? What do you think is likely?
Good question, Emily. Maybe she’ll send her attorney to receive the bad news and worry about the consequences later?
[…] In a document filed yesterday in Bankruptcy Court, it appears the McKinneys and the trustee have come to a settlement in the case. Jennifer and Israel McKinney have already agreed to a waiver of discharge, which means they must keep (and pay!) all their debts and the debts in the orig…y. […]
I’m not an avid Mckmama follower but I do find this a bit odd that there is quite a large amount of people so dedicated to quite literally stalking a woman to the point where her private business isn’t her private business anymore. I apologize if I seem rude but I just don’t get the point of all this. What happens to someone happens but I don’t think this is a way to bring that about. I wouldn’t like my private life to be posted on the Internet for all to read and I doubt you would either. Like I said, not an avid Mckmama follower but the discovery of this site had me a bit upset.
RND – I’m sorry you misunderstood. This article isn’t about Jennifer McKinney’s “private business.” This is about her bankruptcy, which is PUBLIC process. It is public to keep people accountable, and to allow the creditors to have full disclosure of the facts in case they are going to take a hit on money they are legally owed.
Further, Jennifer McKinney is a public person. She has put her life on display for the world to see on her blog and Facebook page. Unfortunately, in the process of doing so, she lied to her audience. And more importantly, she lied to the bankruptcy court! The public clearly has an interest in finding out the truth about her.
I hope this helps! Talk soon! đ
Bankruptcy is everyone’s business. Jennifer blogged every detail of her life from her wall cojrs to her husband’s penis size.
She ranted about socialism yet wanted the US government to absolve them of $750k+ in debt, almost all accrued while they earned $150k+/year.
She lied in court regarding assets & as such deserves everything that comes her way.
That would be wall colours. Apologies.
RND…I am curious as to how you found this blog. It’s not the sort of info you “stumble across” as so many JM followers say they do, (ahem), but rather you would have to be actively searching for it. SOMETHING must have sent you looking.
Apologies Tracy for hijacking your blog. đ
[…] appears that the trusteee believed Jennifer McKinney had attempted to defraud her creditors. The bankruptcy was ultimately dismissed (with no debts being wiped out) and the objection was settled with the McKinneys paying a nominal […]
[…] A balloon payment of $258,126 is due on land contract April 15, 2013. And…..WHOOPSIE…. the bankruptcy was not discharged and MckMama and her stud still owe more than $725,000 to creditors. There is little doubt that they […]
[…] The McKinneys’ bankruptcy has been denied, saddling them with these debts into infinity. And the judge just approved a settlement in the original case which has Jennifer McKinney paying $3,500 to the court for assets that were wrongfully concealed in the bankruptcy filing. […]
[…] Such an indictment is good news for followers of the Jennifer McKinney (“MckMama”) trainwreck. Jennifer and Israel McKinney filed for bankruptcy in December 2011. In short order, bankruptcy trustee Gene Doeling uncovered all sorts of misrepresentations and undisclosed assets. Like the Giudices, the McKinneys were denied a bankruptcy discharge in October 2012. […]