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Boston Bankruptcy Law Update

The law for filing a Boston bankruptcy is clear in many respects. One important aspect is to complete the Boston bankruptcy petition and schedules accurately and honestly. Another important part of any Massachusetts bankruptcy case is to testify honestly at any and all hearings. For example, at all bankruptcy creditor hearings, also known as 341 hearings, debtors are sworn in and the Interim Trustee asks questions. Sometimes your lawyer will make a representation to the Trustee.

Your obligation is to answer all questions honestly and to correct any mistakes your attorney makes. In a case that came down from the First Circuit Court of Appeals last month a debtor lost his bankruptcy discharge as to all his debts after adopting his lawyer’s misrepresentation at the 341 creditor hearing. The case Thunberg, Bruce E. (Lawyers Weekly No. 01-095-11) revolved around the issue of payments (from the wife to the husband) and how they were characterized; i.e. alimony verses settlement. Without going into divorce law here, or the facts of the case, there is a significant difference between support (income) and property settlement (an asset).
 
The debtor’s bankruptcy lawyer misrepresented the way the divorce agreement was worded and how the payments were being made. This amounted to a fraud on the court.
 
We have written many times on the issue of fraud and misrepresentation. It may work for some folks some times, but it generally will not work. And it’s not worth it. There any many legal ways to get around a legal problem. Talking with your bankruptcy lawyer, making and executing a plan, is the best way to work out what may seem like an insurmountable legal issue.