I have been discussing some of the things people can learn from famous people who file bankruptcy, and mentioned on Monday that “Octomom” Nadya Suleman recently had her Chapter 7 bankruptcy case thrown out because she failed to file a dozen required financial documents and statements, according to the AP. Suleman’s case alone demonstrates why individuals filing bankruptcy should always have legal representation to ensure that they are doing so properly.
Another celebrity that we can learn from is former New York Mets outfielder Lenny Dykstra. In 2009, just one year after having an estimated net worth of $58 million, Dykstra filed for bankruptcy. However, a bad situation became worse in 2011 when federal prosecutors charged Dykstra with embezzling from his bankruptcy estate, alleging that the former Major League Baseball player illegally sold more than $400,000 worth of items from his $18.5 million mansion without the permission of the bankruptcy trustee. Now Dykstra is facing charges of bankruptcy fraud, obstruction of justice and money laundering that, if convicted on all counts, could result in a prison sentence as long as 95 years, according to Bloomberg.
Dykstra’s situation exemplifies the importance of total and complete honesty about your situation when filing bankruptcy. Whether you are filing Chapter 7 or Chapter 13, anything less than full disclosure carries significant consequences. Many times, my clients are reluctant because they are afraid of friends or family finding out, but bankruptcy requires a complete and honest evaluation of your debts and circumstances in order for you to receive the fresh start you are seeking. I cannot stress enough that problems are only worsened when individuals try to hide assets or omit debts when filing bankruptcy. If you think that you will be able to get away with hiding any underhanded activity from creditors or the bankruptcy trustee, you would be wise to remember Lenny Dykstra and the near-century worth of hard time he is facing for trying to do that same thing.