Bankruptcy Lawyer Bryan W. Stone answers the question: “Can I get credit after filing personal bankruptcy?”
When a person files for bankruptcy protection one of the first things he or she must do is submit a list of assets and liabilities. The liabilities are obviously important because these are the debts that the petitioner is trying to get out from under. The assets, at least for the creditors and the bankruptcy trustee, are just as important. It’s the assets that can be sold and used to repay creditors and it’s crucial that the list be accurate and complete. In fact, the law requires debtors to list all assets and any failure to do so, assuming it’s deliberate, can result in serious criminal penalties.
In years past, when a person filed for bankruptcy protection the trustee in charge of managing the case would often conduct some due diligence, an attempt to confirm what the debtor says is true is actually true. This might involve asking around or hiring a lawyer or an investigator to confirm that assets in the real world match up with those on the forms. Today, the amount of information available to bankruptcy trustees has increased dramatically, providing opportunities that didn’t previously exist to identify fraud and other financial improprieties. To the amazement of trustees, much of this incriminating information is handed over by the debtors themselves, with social media often serving as the greatest source of such evidence. Though Instagram, Facebook and Twitter have been boons to trustees, they are increasingly encountering an important truth of social media: things aren’t always as they seem.
In some cases, social media has been a big help to those tasked with tracking down hidden assets. In one case, a trustee in Virginia did some searching online about a debtor and discovered that he was an avid collector of guitars. The man had disclosed owning only a handful and estimated their value at under $10,000. After doing some digging, the trustee realized the collection totaled more than 250 and was worth upwards of $900,000. In another recent case, a reality TV star (Abby Miller, from “Dance Mom” fame), was caught by the judge presiding over her case who, after seeing her show, wondered whether she had disclosed all of the income earned from the series. Turns out she had failed to disclose more than $200,000 in income and pleaded guilty to concealing assets.
In other cases, social media has proved frustrating to trustees. The Wall Street Journal told the tale of a trustee who saw pictures of a debtor on Instagram draped in expensive gold chains and other jewels. In court, the trustee revealed the photos, thinking that he’d cornered the man. The debtor then surprised everyone by stating that the jewels and the gold chains were all fake. The same thing happened earlier this year with the rapper 50 Cent, who had pictures on his social media of him with piles of cash. The money was later revealed to be fake, part of a marketing campaign.
Trustees have learned that though social media can prove useful in some cases, you still need to do your homework. Take for instance Todd Chrisley, a reality TV star from Atlanta. The trustee who presided over his case learned that producers of his show would often stock his house with rented furniture and donated clothing, all attempts to make the man appear to be the fabulous and successful star the show portrayed him as. His case shows that pictures may not always tell the whole tale.
If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.
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