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One manís Chapter 7 didn't tell whole story

The process of filing for bankruptcy can be long and complicated in some cases. In fact, anyone considering bankruptcy in Miami, Florida, is advised to first consult with an experienced bankruptcy law attorney in order to determine whether Chapter 7 bankruptcy is the best option for them, as well as guarantee that the process is completed correctly. One case illustrates how failing to fully disclose the facts about one’s financial situation can seriously impact your personal bankruptcy case.

In order to proceed with filing for Chapter 7 bankruptcy, an individual is required to accurately cite the full extent of his or her debts. A list of assets is compiled and made available to the public. Failing to fully disclose one’s property can equate to bankruptcy fraud in some cases, potentially resulting in imprisonment and/or hundreds of thousands of dollars in federal penalties. One prominent restaurant investor is now having to answer for his Chapter 7 bankruptcy claims, since it has come to light that he failed to note owning a portion of several restaurants.

Richard Cervera filed for Chapter 7 bankruptcy in early January of last year. According to bankruptcy documents, Cervera claimed that he owed hundreds of thousands of dollars to creditors and had his Miami condo foreclosed upon. What Cervera did not mention, however, was that he had achieved partial ownership of eight Washington DC restaurants a little more than a week earlier. Shortly after filing for personal bankruptcy, Cervera testified that he was unemployed and his case ended in the fall of 2013.

Once the restaurants that he partially owns went into bankruptcy themselves, Cervera made statements in that case and admitted to working for the restaurants at the time he once claimed he was unemployed. Now, bankruptcy attorneys for Cervera must attempt to have his asset list revised.

Source: Wall Street Journal, “CEO of Capitol Hill Restaurants in Bankruptcy Had His Own Problems,” Katy Stech, May 29, 2014

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