Debtor Who Failed to Disclose $5000 In Lockbox Receives Discharge


Debtor Who Failed to Disclose $5000 In Lockbox Receives Discharge Since United States Trustee Failed to Show Requisite Intent

Filing the necessary paperwork to show your debts and assets at the time of initiating your bankruptcy petition is extremely important. But a new case indicates that failing to show requisite intent could in some cases protect a debtor who omitted certain information. In the case in question, a full time employed single mother who did not receive child support put $5000 of her federal tax refunds in a lockbox in her home.

The purpose of this, according to the debtor was to buy a house from a landlord and the debtor earmarked them for that purpose. That same person initiated a chapter 7 bankruptcy case via a voluntary petition approximately a year after that point in time. The funds were never disclosed on her bankruptcy schedules or the statement of financial affairs.

According to the debtor, she provided these funds to the landlord in Mid- March to pay her rent in advance or to buy house on contract. The trustee in the bankruptcy case made a demand for the landlord to turn over the funds and the debtor shared that she had informed her attorney of these funds before her debtor’s schedules were prepared. She then went on to file an amended schedule B to disclose the funds.

Beginning in April 2016, the debtor paid an approximately $4,700 in installments to make up portions of the funds demanded by the trustee within the timeframe established by the trustee. However, since the trustee failed to show requisite intent, the debtor who initially filed was able to receive a discharge. If you have pertinent bankruptcy questions, it is important to schedule a consultation with a knowledgeable bankruptcy attorney as soon as possible.

Your ability to protect your rights may depend on talking to an attorney you can trust. Don’t wait to get help from a lawyer who cares about your future- contact Spivack Law today to talk bankruptcy options at 856-488-1200 or by filling out our convenient online contact form.


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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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