We all make mistakes, but during bankruptcy it is important to be both honest and accurate regarding your finances. Last month Real Housewives of New Jersey star Teresa Gudice and her husband Joe were indicted on federal criminal charges for bankruptcy fraud. This month, Teresa’s former co-star Danielle Staub settled her own bankruptcy issues by agreeing to pay $35,000 to creditors.
Staub reportedly had close to $1 million in debt when she filed Chapter 7 bankruptcy in June 2012. During the bankruptcy it was discovered that she had fraudulently transferred home furnishings and jewelry to family and friends. Staub answered the trustee’s concerns through a settlement. Staub has made an initial payment of $5,000 to the trustee for distribution to creditors, and has until the end of December 2013 to pay the remaining balance. Staub’s creditors that will receive payments include Nordstrom, Land Rover, American Express, and Capital One.
Transferring assets before bankruptcy creates problems and should never be done without legal advice. If the transfer was already made, your bankruptcy attorney can advise you about the best way to minimize the damage. State and federal exemptions offer generous protections and statistically only one case in twenty has an asset that the trustee can take. Transferring your property before bankruptcy in an effort to hide your assets can result in loss of protection, denial of bankruptcy discharge and even criminal charges!
Table-flipping tantrums aside, the Real Housewives of New Jersey have given the American public terrific examples of inappropriate behavior. During bankruptcy it is best to completely, honestly, and accurately describe your assets, income, expenses, and debts. Anything less can land you in hot water.