Since April, a story has been run by a website or twenty with screaming headlines about the Giudices’ debts being wiped away for pennies. Recently, this absurd story has resurfaced with more loud headlines like, “GIUDICES SETTLE $13.5 MILLION DOLLAR BANKRUPTCY BY PAYING $15, 001.03!!!” This seems to have sent many of you into a frenzy! Oh the outrage! All that debt just wiped away! How do people get away with these things?
I would be outraged too, if it were true. But Tamara, I hear you saying. That one site had official court documents! They have proof that this happened! While it is true that the Chapter 7 Trustee’s Final Account and Distribution Report Certification That The Estate Has Been Fully Administered And Application To Be Discharged (TDR) form is floating around the Internet, what is NOT TRUE is the interpretation of the report.
It amazes me that websites owned by people who are licensed to practice law, seem unable or unwilling to read a simple bankruptcy trustee report.
But first, let me very, very briefly explain the most basic concepts of Chapter 7 bankruptcy. People file Chapter 7 bankruptcy asking for the government to protect them from their creditors. Essentially, they go to a court and say hey, we fucked up. We bought a bunch of crap we can’t afford and now everyone is coming after us and we can’t pay them and soon we will be living on the streets eating cream of mushroom soup cooked over small fire in an alleyway. We’re fucking idiots with no financial sense whatsoever. Oh please, government, they pled, give us a do over and we promise to go forth and stop buying Louboutins we cant’ afford. We will even give you some of our shoes back if you want them!
Why does the government do this? Because we live in a nanny state where many people have been conditioned to believe the government should supervise our personal finances. Because the government is super-duper good with finances.
In general, the financial idiots, officially called debtors, (Disclaimer: a small percentage of people who file for bankruptcy must do so because of the insane costs of healthcare in this country can completely bankrupt you at any time if you become critically ill.) go to court and they promise on Dolce & Gabbana and the Bible to tell the truth. They list all of their assets and all of the debts and a trustee takes a gander at things. The goal of a chapter 7 debtor is to obtain an order of discharge. An order of discharge is a court order where a trustee adds up all the assets the debtor has and decides how to distribute the money to all the creditors and a judge signs off on it. After the order of discharge, the creditors take what they can get, and lose the rest of the money they are rightfully owed. The court order eliminates the affected debt and the idiots get a do over. There are tons of specifics and of course any money owed to the government (taxes, school loans, etc) will never be discharged because the government has been given the idiots’ purse strings and they will take first before anyone else gets a dime.
When Joe and Teresa went to file for bankruptcy, they committed fraud. They hid assets and lied under oath to the judge. The government doesn’t like being lied to and that is how the Giudices found themselves preparing to do some federal prison time in the first place. The Giudices were tossed out on their asses, the government stopped considering their bankruptcy case and the feds came calling. They were not allowed to file bankruptcy and their creditors are free to pursue them through any legal means available to be repaid in full.
So back to that standard form Chapter 7 Trustee’s Final Account and Distribution Report Certification That The Estate Has Been Fully Administered And Application To Be Discharged (TDR) that some sites are even posting in full. It’s a government form that is completed anytime anyone files for bankruptcy to explain the outcome. Remember, The goal of a chapter 7 filing is to obtain an order of discharge. And order of discharge eliminates the debt and give the financial idiots a fresh start.
Here is the final order on that document that certain sites keep referring to with an erroneous interpretation:
“The Chapter 7 trustee objected to the discharge of debtors and an order was entered denying the discharge of debtors.”
So what was all of that nonsense about getting a clean slate for $15,001.03? Remember, I said the government always pays itself first with the idiots money? That was the court cost and related fees for wasting the bankruptcy courts time. The government yanked that right out of their bank accounts and informed all of their creditors that Giudice debt hunting season officially opened again in April of 2014.
I have no idea why sites keep running these erroneous stories. I explained this all back in April HERE and HERE. I guess it is good for ratings to keep saying that the Giudices debts were erased when they were not. If you want to be outraged, be outraged that sentencing is taking so long and that Teresa’s attorney keeps giving interviews trying to plant the seeds in the media that the plea deal allows for probation. It doesn’t. The plea deal is very specific. The attorney is allowed to request probation and make his case to the judge. The judge can do anything she wants pretty much. But the plea deal agreed to by both sides is very clear on the amount of time she should serve.
We shall see the fate of the Giudices play out on October 2, 2014. Maybe. Unless it gets pushed again.