Would your ex-spouse torpedo your bankruptcy case?

spousesRussell DeMott, a bankruptcy lawyer from South Carolina has written a very entertaining article about the extents that ex-spouses can go to make life miserable for their old partners — including combing through bankruptcy petitions and making all sorts of objections, from the accurate to the ridiculous.

DeMott’s point is that if debtors with an ex on the prowl out there should assume that they will read through a bankruptcy petition (which is a public record), and possibly try to make trouble by pointing out errors and omissions in it. Therefore, it makes sense to be very careful in declaring everything you own when filing for bankruptcy in these circumstances.

I’ll add another twist to this scenario: if you’ve been divorced, its possible that a bankruptcy trustee will himself get a hold of the case file from the divorce court, and see if there are discrepancies.

In one case I had, a trustee discovered that the debtor listed four junky old cars on his divorce papers, but only two on his bankruptcy petition. Nothing bad happened in this case, (all the cars were essentially worthless), but serious omissions are to be avoided at all costs for debtors looking for a smooth ride through the bankruptcy process.

 

By Doug Beaton

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