Chapter 7 Bankruptcy: Dishonest Dumb Debtor Loses Discharge Order

The main goal in filing a Chapter 7 bankruptcy case is to discharge your debts.  However, to get a discharge, a debtor has to disclose all assets and provide an accurate valuation of the assets.  
Last month, a court revoked the discharge of a debtor, Jerry Jones, who failed to be completely forthright about his assets.   When Mr. Jones filed his bankruptcy schedules, he did not admit to owning several assets.  Even when he testified under oath to the bankruptcy trustee, Mr. Jones omitted a number of assets and undervalued other assets, largely valuing them at zero.
Mr. Jones eventually got his discharge in due course.  However, within a year of the date the discharge was granted, the United States Trustee discovered the debtor had omitted and undervalued assets in his bankruptcy schedules, and brought an adversary action to revoke the discharge.  After two days of hearings, the bankruptcy court ruled that the debtor’s omissions and undervaluations violated 11 U.S.C. §727(a)(4) and revoked the discharge.  On appeal, the Ninth Circuit affirmed.
Thus, it is crucial in filing bankruptcy cases that a debtor is honest about what she owns and that she provides a fair value of the items declared.  
The name of the case discussed in this article is Jones v. U.S. Trustee, Eugene, ___ F.3d ___, 2013 WL 6224330 (9th Cir. 2013 Dec. 2, 2013 Dkt. no. 12-35665)   Here is  link to the Court's opinion:  Jones case

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