Real Housewives of NJ star faces real legal problems

Bankruptcy laws provide people with debt issues a way to get their finances back into order. The government has passed legislation and set up special courts to assist those who seek bankruptcy protection. The government requires certain demands of people filing for bankruptcy, the most important of which is truthfulness. When a person files for bankruptcy, he or she is supposed to divulge information about assets and income so that both the debtor and the creditors can be treated fairly. When someone attempts to mislead the court, such dishonesty can be prosecuted criminally as bankruptcy fraud. This is what has happened to two of the television personalities who appear on the reality show "Real Housewives of New Jersey", Teresa and Giuseppe Giudice, in connection with their Chapter 7 bankruptcy filing.

The bankruptcy filing

In October, 2009, the Giudices filed for Chapter 7 bankruptcy with the U.S. Bankruptcy Court in Newark. They claimed to have $10.85 million of debt against an annual income of $79,000, according to NJ.com. Now that the charges of fraud have come to light, it appears that the Giudices concealed numerous assets and lied about their incomes in their filings.

According to the indictment, there are six counts of bankruptcy fraud in addition to 33 other counts of criminal activity, including mail and wire fraud and bank fraud. Some concern only Teresa, others refer to the husband and wife. Among the properties concealed were Teresa's TG Fabulicious business, rental properties, vehicles, a boat and a property that housed the family's pizzeria. Teresa Giudice also failed to divulge the $280,000 advance she had accepted from the publisher of her first cookbook a week before filing and the increased income she was generating from her appearances on her television show. In fact, according to Forbes.com, she was listed as "unemployed" in the couple's bankruptcy petition.

Shortly after filing their bankruptcy petition, the couple was spotted on a shopping spree, spending over $50,000 on items to redecorate their multi-million dollar home, according to The New York Post. Although the Real Housewives of New Jersey had not yet made Giudice a household name at the time of the filing, the couple was well-known enough to be recognized when they went out and spent tens of thousands of dollars.

The trustee who was overseeing the petition for bankruptcy asked the court to deny it. She also filed a complaint about the many falsehoods in the petition. Last month, a federal grand jury handed down an indictment against the reality television stars, including the aforementioned six counts of bankruptcy fraud. Both Giuseppe and Teresa Giudice have pled "not guilty" to all of the charges.

Lessons to be learned

If there is anything to be taken away from the couple's criminal charges, it is this: Be truthful. When filling out a bankruptcy petition, honesty is important. Based on the charges against the Giudices, if convicted, they could both spend decades in prison and face millions of dollars in fines. In addition, the husband, who is not an American citizen, could be deported.

Bankruptcy is a very useful tool for people looking to get back on their feet after facing financial difficulties. However, it is a legal proceeding in which telling the truth is required.

If you have questions about filing for bankruptcy, an experienced attorney can provide answers. Contact a bankruptcy lawyer for advice about how filing for Chapter 7 bankruptcy can offer you relief from consumer debt.