January 14, 2018

Background:

  • Chapter 7 Debtors owned a 5 bedroom home.
  • House was foreclosed.
  • Debtors entered into an agreement with the Trustee to sell the furniture in their home at auction.
  • Without any approval, Debtors sold the furniture and never even mentioned the sale to their attorney.
  • Trustee came to the house to start the sale of the furniture and found that the house was empty.

Court Ruling:

  • Denied the debtors’ discharge of their bankruptcy.
  • Found fraud was committed; Court did not believe that the selling of the furniture was a misunderstanding, especially when they signed an agreement.
  • There was no good excuse as to why they Debtors cleaned out their home and sold everything. The Court ruled that their explanation that they needed the money to move was unacceptable.
  • Not only was their Chapter 7 Case denied but also ordered to pay the Trustee $937.50.

The proceeds from the Sale of the Furniture could not even come close to the denial of their discharge cost them.

Honesty is always the best policy.