Bankruptcy

Inaccurate Schedules Lead to Discharge Denial

By Bill McLeod, Esq.

There is any number of ways that a debtor can get a discharge denied, and certainly, I have blogged about them here. One of the big ones is the most obvious: lying. I came across a recent case out of the Southern District of New York that should serve as a warning to all debtors ? and especially to those debtors who think they can file bankruptcy without an experienced bankruptcy attorney. This pro se debtor was a former attorney (his license was suspended). There?s nothing in the record that suggests he was experienced in bankruptcy?but he still should have known better.

The case was filed in August 2006. In his original schedules, the debtor listed his monthly net income as $2,144 and expenses of $2,427. Among the expenses was $500 per month in support for ?additional dependants not living? with the debtor. He also did not indicate that he had any student loan obligations, and wrote ?0? in the box that specifically asks if the debtor has student loans.

A few days after filing the petition, the debtor amended his schedules showing an increase in his monthly expenses. In this amendment, he claimed that his expenses had increased, and identified a monthly domestic support obligation of $600 (and he identified the creditor to whom he owed the child support). He also stated he spent $20 per month on recreation.

Only 9 days latter, the debtor amended his schedules to identify a new creditor: a phone company who had an unsecured non-priority claim of $190.

In March 2007, the schedules were amended again. This time, the debtor added additional creditors and showed that his income was $2,840 and his expenses were $2,829. His recreation expenses were now $140 per month.

Full post as published by McLeod Law Offices on July 02, 2008 (boomark / email).