Category Archives: Taxes

They Were Under Oath & On Reality TV! Part 1

Over the last couple of years, there have been two high-profile examples of reality television stars failing to fully reveal all of their property and possessions during bankruptcy proceedings.

These two examples provide insight into the effects of untruthfulness – where the intersection of facts and bankruptcy proceedings collide with fame and fortune.

Lying under oath has consequences for all – the rich and famous, the middle class and for the down and out. Anyone lying during their bankruptcy proceedings will get caught, and can pay a high price. Jail time is the scary reality!under oath

Joe and Teresa Giudice are our first case study. Their lives were detailed in a Bravo reality show called “Real Housewives of New Jersey,” which premiered in May 2009. That high profile and visible television presence spelled doom for them.

The Giudices filed a chapter 7 bankruptcy in October 2009, claiming that their income was not sufficient to pay their debts. That may or may not have been true at the time. But, their disclosure filed under oath to the New Jersey bankruptcy court in 2009 was definitely not true. Much of that falsehood was created by ‘leaving off’ personal property. Like ATVs, go-karts, a rental property (see page 17 on this linked U.S Department of Justice indictment), a cement mixer (who hides a cement mixer?).

Ultimately, in July of 2013, Joe and Teresa Giudice were federally indicted on 39 counts, including lying on their bankruptcy disclosures, and other counts stretching back over ten years, for fraudulently obtaining secured loans against properties, and tax evasion. In some cases, they had created false documents, like pay stubs for jobs that didn’t exist and tax returns that were never filed and were largely fiction. In other cases, they moved income around to shell companies.

The evidence was overwhelming. On October 14, 2014, after Teresa had previously plead guilty to four counts and Joe to five counts of bankruptcy and mail fraud, Teresa was sentenced to fifteen months in federal prison, with her husband Joe facing forty-one months.

Stay tuned for part two, with Abigale Lee Miller of Dance Moms.

Sources: Justice.gov, NYTimes.com, & this NYTimes.com.

Saving Pennies, Losing Dollars: Tales of Bankruptcy Filings Without Legal Advice

Mounting bills, calls from creditors and declining funds leads to a maddening level of desperation. People often feel that they are too broke to hire an attorney to file their bankruptcy. You are between a rock and a hard place, you need to get rid of the stress of your debts and it seems like the best thing to do is to file a bankruptcy on your own.

You are not alone in this thought. Between 25% and 33% of all bankruptcies filed in Arizona are filed by people who have either attempted to prepare their own bankruptcy documents or hired a paralegal service to prepare them.

Many of those people end up having an unpleasant and expensive experience with the bankruptcy court. Many will have assets confiscated. Many will lose the only decent sum of money they receive all year – their tax returns. Yes, the bankruptcy court will take your tax returns! This is why you need to plan for a bankruptcy with an attorney.

Here’s an example what can happen if you choose to file a bankruptcy without the assistance of an attorney.

I met with a woman about a year ago who was unaware that her tax refund, which was substantial, would be confiscated by the Bankruptcy Court Trustee. She ending up losing nearly $8,000 in her tax return money that she desperately needed to the bankruptcy system. Because she didn’t have an attorney at her side. That money could have been used to purchase a vehicle, pay for an attorney, and help with utilities. With careful disclosure of that spending, she would have survived her bankruptcy without losing other assets. She thought she had to be in a rush to file the bankruptcy, and didn’t get the advice she needed to plan accordingly.

This can be avoided with experienced representation. 

I stress that this planning must be done appropriately, by competent attorneys with an intimate knowledge of what is allowable in pre-bankruptcy planning and what is not. Pre-bankruptcy planning is intricate and can take time. But it is extremely valuable.

Another classic scenario involves a person who has been sued, and is consequently highly motivated to file a bankruptcy before a wage garnishment starts, but may also have a large tax refund coming, or perhaps a reimbursement for some work expense, or a personal injury claim, or an inheritance.

Again, they rush in with no legal advice, get a paralegal service to type up what they think they need to file, and then lose assets unnecessarily.

Recently, my office assisted a bankruptcy client with pre-bankruptcy planning on how to purchase a home for their family by using a personal injury recovery as a down payment. We were able to help them to keep that home.

Saving pennies can cost significant dollars. The main ally you have is an experienced attorney who can offer sound advice and good knowledge. Document preparers, and, sadly, lawyers who charge cut rates and who will only provide cut-rate legal advice, are not in your best interest.

Don’t be penny-wise and dollar foolish!

If you have questions about your bankruptcy eligibility, or ways to avoid bankruptcy through other means, schedule a free initial consultation with Daniel Rylander by calling (520) 299-4922. Upon hire, we provide sustained support throughout your bankruptcy process.

Planning for a Successful Bankruptcy Filing

“I just want to get this over with . . . “
“Do you really have to meet with someone at the Bankruptcy Court”?
“And are we really required to provide all this information”?
“I just want to get this over with . . .”

In order to get an informed, legal, ethical and successful bankruptcy result, you need a plan. That plan, put together with your attorney’s expert advice, will – depending on your circumstances – likely involve timing the filing of the case, or getting your tax refund you are owed by governments spent wisely. It will involve disclosing properly your financial transactions, and getting advice to avoid financial transactions that may hurt, or complicate your case.

We find that the most stressful time for our clients is before their bankruptcy is filed. Make sure you understand your plan, truthfully inform your lawyer of any changes to your financial and asset situation, and work with your lawyer and staff to obtain your debt relief. With that approach, your successful result is within reach.

Debt relief through bankruptcy is more than just the numbers. It’s the fear removed. It’s the knowledge that you did it honestly, and earned the relief.

You can get through it. We can help you create a plan. Schedule an appointment today.