If you are a debtor with a master’s degree in accounting, you better make sure that your bankruptcy petition is 100% accurate on date of filing. In Re Gorman, the chapter 7 debtor had a master’s degree in accounting. He worked as a controller for 4 different companies. Moreover, debtor owned and operated a professional services company that provided accounting and tax services to the public. In all of these positions debtor either prepared financial forms and reports, or arranged for their preparation. In addition to his work in accounting and finance, debtor was engaged in numerous business ventures. However, he failed to disclose that he owned equity interests in at least 10 closely held corporations in the statement of financial affairs of his bankruptcy petition when he filed his chapter 7 case. Instead, his statement of financial affairs debtor said he had no “stock and interests in incorporated and unincorporated businesses.” He did disclose his interest in one defunct entity which he valued at zero.

Debtor blamed his high level of accounting background as the culprit for failing to disclose his equity interests in ten corporations. He said that his accounting background turned out to be more of a hindrance than a help when it came to preparing his bankruptcy schedules. As an accountant, he said, he was trained to recognize assets only if they have value. He also said he was under great stress when he filled out his bankruptcy schedules because he was the primary caregiver for his parents, both of whom were terminally ill. The usual, blame it on the parents excuse.

Debtor argued that he cured any deficiencies in his schedules and statements by making a full disclosure at the 341a meeting of creditors and providing tax returns to the trustee. Although he had the right to make amendments to his bankruptcy petition which would date back to the date of filing to flesh out his full disclosure at the 341a meeting, debtor apparently did not do so. I can only surmise that debtor did not know about his right to amend the petition because he might have been representing himself without counsel. If he made the amendments soon after his testimony at the 341a, there probably would not have been any problem.

《楊清泉律師專欄》ACCOUNTANT WITH MASTER’S DEGREE DENIED DISCHARGE(PART II)