In a case where the bankruptcy debtor omitted assets and income on her federal bankruptcy petition, the United Bankruptcy Court revoked the discharge. We advise our clients that dishonesty is one of the biggest reasons for failures to secure discharge, problems and additional costs and attorney fees in Chapter 7 personal bankruptcy.
In the case that came down from the Court recently, the debtor significantly misstated the value of her checking account (over $8,000), omitted her monthly alimony ($13,000), gave false testimony about her income, misstated her annual income for 2004 by over $48,000, and misstated her income for a period of 2005 by over $40,000. The Petition, Schedules, and testimony under oath seems fraught with misstatements, misrepresentations and with income grossly undervalued. The Court found that the False Statements were “relating to a material fact.”
The case is more complicated when the underlying facts come to light: Mary Larson was found criminally responsible for the death of Lloyd Howell when she struck his motorcycle. She filed for bankruptcy protection and the issue became whether she could discharge her responsibilities in bankruptcy, whether the $500,000 homestead exemption applied, and whether the plea of Admission to Sufficient Facts in State Court constituted a “conviction” in the Bankruptcy Court. Unfortunately, it appears that Ms. Larson’s bankruptcy case was derailed for several reasons.