As with any financial proceeding, it is essential that bankruptcy filings be accurate and properly submitted. Since the process can be complex and it might be difficult to understand all of the requirements of bankruptcy and what sort of disclosures are needed, many people struggle to complete the process without the help of experienced counsel.
It may be tempting when times are tought to try to work through the bankruptcy process on your own, but recent cases show the very serious consequences that are possible if the filing is inaccurate or presents misleading information.
One such case is that of Bravo TV's Real Housewives stars Teresa and Joe Guidice. The couple have been displayed on the show in the past as very opulent and successful, but eventually it came to light that their finances were not in the order they had portrayed on television. They filed for bankruptcy back in 2009, listing about $11 million in debt from sources like mortgages, clothing stores, and a fertility clinic.
While all of this financial upheaval was going on, the couple was also rising to fame through their appearance on the reality television show. Teresa went into business as a chef, promoting cookbooks and speciality food items. As a result, their income began to grow even as they faced huge amounts of debt.
Now, prosecutors are saying that the couple did not submit accurate information during their bankruptcy proceeding and that they may have committed fraud. If they are convicted they will face heafty fines that could reach into the millions of dollars and they may be sentenced to time behind bars.
Although this is an extreme example, it does show how crucial it is to present accurate information during the bankruptcy process. One financial situation can change drastically from the moment that you declare bankruptcy to the time that the process is complete, but disclosure requirements remain.
Source: Associated Press, "Real Housewives of NJ' stars plead not guilty," David Porter, Aug. 15, 2013.