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She Tries, She Lies

Posted on August 1, 2009 | Posted in Collections

 The bankruptcy system is said to exist to assist the honest but unfortunate debtor who finds herself in over her head. It is not intended to help people who are attempting to beat the system. Often, the dishonest and fortunate debtor is able to do just that; sometimes, however, she is not. In Re Nahreen Yalda Mako, a 2009 decision of the Registrar in Bankruptcy, the bankrupt received a rude awakening.

The bankrupt was a 36-year-old married woman earning $1,600 net per month as a cleaner. She was applying for a discharge from her bankruptcy, an application that her creditors, particular Amex, contested. She knew about the process because her husband had been discharged in his bankruptcy in 2004.


The bankrupt testified that she found herself in her unfortunate circumstances because she had previously sent money in cash to her family in Iraq, purchased medicine in Canada for delivery to her family in Iraq, and incurred an additional $50,000 in gambling losses.

The Registrar dealt with four areas:

1.   The husband and his brother purchased a townhouse, into which husband, wife, and their family moved, 3-6 months before the wife’s bankruptcy. The bankrupt never explained how her husband, who was earning $1,200 per month part time, managed to amass $60,000 in equity so soon after his own bankruptcy. As the Registrar put it, “One cannot help but wonder how much of that equity was earned or contributed to by the Bankrupt, and conveniently placed into her husband’s name.”

2.   The bankrupt testified that she did most of her gambling at Mohawk Race track and drove there on each occasion. However, she could not state exactly where it was. She believed that it was somewhere on Highway 401. She also stated that Woodbine racetrack was on Woodbine Avenue.

3.   The bankrupt testified that she had complete strangers ferry $800 per month in cash payments to her family in Iraq. The Registrar stated, “she could not really explain how, (she was) able to each month find complete strangers to take cash half way around the world, and deliver it to her family, in an active war zone.”

4.   The bankrupt claimed that she purchased medicine for her mother’s diabetes, presumably delivered to Iraq by the same strangers who delivered the cash. She initially testified that she was able to fill prescriptions in Ontario written by doctors in Iraq. She then said that doctors in Ontario wrote the prescriptions without ever meeting her mother. When pressed, she could not remember the location of the Ontario pharmacy or the names of the Ontario doctors. She then testified that her mother was fianlly cured – of diabetes and high blood pressure! Ultimately, she testified that her mother was never ill, but that she sent the medicine to her cousins in Iraq instead.

No Way

The Registrar did not believe the bankrupt – and said so. He also stated,

I accept none of the submissions made as to disposition. Any conditional payment term would amount to a mere license fee to run up credit cards, and keep a sizeable amount of the funds, merely by coming forward with a half baked story of gambling and shipments of money overseas. I do not believe that the creditors’ money has, in fact, been lost, and am not prepared to condone her conduct by imposing a license fee for it.”

The Registrar denied the discharge.


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