February 8, 2018

Background

  • Debtor was an attorney
  • Involved in an auto accident in 2007; filed a personal injury lawsuit Nov. 23, 2010
  • Involved in another auto accident in 2008, filed personal injury lawsuit March 6, 2011.
  • Filed for Chapter 13 Bankruptcy
  • Failed to disclose the lawsuits at Meeting of Creditors or in the financial affairs of the Bankruptcy Petition.
  • Debtor’s attorney told the Trustee that he was going to add any important lawsuits in the future.
  • Debtor’s schedules were amended to add several creditors but again no lawsuits.
  • Filed another set of amendments and disclosed the two lawsuits and the fact that one had settled.
  • Trustee moved to convert the case from Chapter 13 to 7.
  • Debtor agreed that she failed to disclose the two lawsuits but blames her lawyer for the lengthy delay in disclosing them.

Court Ruling:

  • Debtor is an attorney and should know better than to blame her attorney.
  • Debtor’s attorney’s testimony at trial “was not credible in any respect.
  • Debtor/attorney could not convince the Court that her failure to disclose pending lawsuits was not intentional and fraudulent – debtor had an obligation to be transparent and disclose the two lawsuits.
  • Attorney blaming her attorney loses. – Discharge denied.

Bankruptcy Court rules are clear you must be honest and provide full disclosure of all pending lawsuits.