Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Will I lose my property if I file for bankruptcy ?”
A Colorado couple say they have been unfairly penalized by a United States bankruptcy judge because they run a legal medical-marijuana business.
The couple—Frank and Sarah Arenas—filed for bankruptcy in February of last year. A bankruptcy judge dismissed their bankruptcy petition in August because, the judge ruled, most of their income came from their medical marijuana business—an activity that is still illegal under federal law.
Through their attorneys, the couple appealed, arguing that the United States Justice Department created a “Catch 22” in which Frank and Sarah Arenas are ensnared by giving its tacit approval to the now-thriving medical and recreational marijuana industries in Colorado. Then-Attorney General Eric Holder announced in 2013 that federal law-enforcement officials would not prosecute federal pot crimes in the states of Colorado and Washington.
“Refusing to allow marijuana-derived assets to be protected in bankruptcy in the same way other assets are,” however, amounts to “passive prosecution” of crimes the federal government had pledged not to prosecute, attorneys for Frank and Sarah Arenas argued in an appeal of the bankruptcy judge’s ruling. The Arenas are seeking to overturn the judge’s ruling and have their bankruptcy petition reinstated.