Big trouble ensues over bankruptcy debtor’s failure to list his watch on his bankruptcy schedules

File this under “what not to do” if you’re filing a consumer bankruptcy case: “Forget” to list your Rolex watch on the bankruptcy schedules.

Brian Sullivan, a debtor from Maine, found this out the hard way recently when the First Circuit Court of Appeals denied his discharge. (In other words, he got nothing out of the case, despite filing bankruptcy: he still owes all his debts).

It was, of course, a spiteful ex-girlfriend who blew the whistle on him. She showed up at the debtor’s meeting of creditors and told the trustee that Sullivan had omitted listing the Rolex she had given him on the bankruptcy filing.

Incredibly, Sullivan was wearing a Rolex watch at the meeting.

This set off a round of expensive litigation where it was found that not only was the watch omitted, but the value of the debtor’s bank account and a 1970 Chevrolet Chevelle were understated.

Although the debtor gave the bankruptcy judge some semi-plausible explanations for each of these “problems,” and eventually amended his bankruptcy papers, she concluded he had not proven his case and should not receive a discharge in bankruptcy.

All in all, this case is a prime example of what I tell my clients constantly the fundamental rule of bankruptcy as far as they are concerned is: LIST IT OR LOSE IT!

Had this debtor just been more upfront with the court system from the get-go, chances are his problems would have been much lesser or even non-existant.

 

By Doug Beaton

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