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From: Northern KY Legal Aid Society
email: mailto:jpmnklas@hotmail.com
link: http://
date: 10/25/0 18:13
Date: 12/21/00
Time: 11:27:00 AM
Remote Name: 207.251.188.199
I'd be grateful if anybody could offer suggestions or comments on some clients we represent who got caught in the income verification process. If this request for comments should more properly be directed elsewhere on this site, I'd be grateful if you let me know. The clients we have heard from are elderly, and live in different project-based Section 8 complexes. They failed to report income in past years. Both received the letters from HUD, concerning nonreportage of 1998 income, and they immediately went to speak with their building managers (believing they faced only prospective rent adjustment). At the meetings, they agreed to very onerous repayment agreements which acknowledged overpayment of benefits from 1997-2000 based on non-reported income, and which provided that failure to comply with terms of the repayment agreements would result in termination of the lease and tenant assistance. They believed they would be evicted if they did not sign the agreements. One client acknowledged an overpayment of $7,100 and agreed to repay over 60 months with a $710 downpayment. The second person acknowledged an overpayment of $4100, and agreed to repay over 12 months with a $2,000 downpayment. The downpayments make me believe the agreements were intended to bring default. In each case, the tenants acknowledge the failure to report was knowing. That makes addressing these situations problematic. State court seems out of the question. Asking for HUD intervention (as the information sheet the tenants were provided with the letter offers) risks bringing to their attention which could result in a fraud charge, or a termination of assistance. The other possibilities would be seeking to discharge the debt under Chapter 7, or to rework the admitted obligation through a Chapter 13. HUD might challenge discharge under Chapter 7 alleging that the debt arose because of false pretenses, false representations, or fraud. Chapter 13 might work out better in that regard. However, there is still the risk that the building manager might retaliate by trying to terminate the assistance and/or evict because of program violations. Our one client simply cannot come up with $2,000, so barring some flash of light, we have no option but to try for HUD intervention, and, if unsuccessful there, a bankruptcy. Any thoughts or direction anybody might have would be greatly appreciated.