Lawyer Facing Bankruptcy Fraud Charges for Alleged Dishonesty

Continuing on our discussion about the importance of honesty during bankruptcy, we focus on the case of Charlotte real estate lawyer Victoria Sprouse, who is facing charges related to bankruptcy fraud.

Sprouse’s case has caught national attention, as a judge recently denied bail. The judge told Sprouse she participated in, “breathtaking acts of deception by a trained lawyer.” Sprouse allegedly hid accounts following her bankruptcy filing by using the names of two other people to conceal assets.

Any decent bankruptcy lawyer will tell you that honesty and full disclosure are the incredibly important to any bankruptcy case. When you sign a bankruptcy petition, you do so under the penalty of perjury. If you file for bankruptcy, regardless of whether it’s Chapter 7 or Chapter 13, you need to be as honest as possible with your attorney and answer all questions truthfully. An attorney can only fill out a petition using the information you provide—if you lie to your attorney or hide information from him or her, the entire process is dishonest.

Trustees and creditors can access your petition and question your disclosure. If you’re dishonest, they can find out quickly and you could face the possibility of fraud charges, significant fines and having your case dismissed. Sprouse allegedly failed to disclose two beachfront rental properties she owned and was collecting income on to the court following her bankruptcy petition. It’s unclear why Sprouse did this, but the transparency needed during a bankruptcy proceeding should not scare people away from filing if they’re facing economic hardships and need debt discharged.

If you need relief from things like credit card debt and medical bills, filing for bankruptcy can be a solution. Think about the financial flexibility you would have if your unsecured debts were eliminated—for most people underwater financially, a successful filing far outweighs the cost of having some information made public.

If your financial situation is a problem, contact our office now for a free consultation, whatever your debt situation might be. We can find a solution that will fit your needs.

Law Firm of Kevin D. JuddWashington DC bankruptcy attorney


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