66 East Main Street, 3rd Floor Little Falls, NJ 07424

Cursed Asset is Still an Asset of Estate (Thrown Away on Valentine’s Day)

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February 14, 2018

Background:

  • Debtors said they forgot about a ring worth $46,295 when they filed for bankruptcy.
  • Wife stated she threw the ring into a nearby lake because it reminded her of her husband’s marital infidelity.
  • Husband admitted purchasing the ring for $31,000, had the ring reworked for another $4,510.
  • Appraisal had been done and the ring was valued at $46,295.
  • Coincidentally the ring was listed on their insurance policy for $46,295.
  • Debtors explained that it was wife’s sister’s ring and then finally admitted it was their ring.
  • Debtors stated they did not have it when they filed for bankruptcy (since it was in the lake) so they did not list the ring.
  • At trial, wife admitted she threw the ring into the lake on Valentine’s Day because they believed it was cursed.

Court Ruling:

  • Context matters in determining Debtors’ states of mind when failing to disclose the ring.
  • Timing -Debtors first met with a bankruptcy attorney in the Fall, nine days later they filed for bankruptcy.
  • Due to the dramatic nature of how the ring landed in the lake and the sentimental value – Court did not believe that an event that happened just one week prior to meeting with counsel and less than 2 months before filing – Wife’s explanation of such a short memory was hard to accept.
  • Chapter 7 Trustee hired scuba diver just weeks before the trial and the ring was found – the ring did exist.
  • Debtors were also found to have loss of memory in transferring a cabin 6 months prior to filing.
  • Bankruptcy was denied.     Maybe the ring was cursed……