An 89 year old WWII vet hid $66,000 in gold and silver in his backyard, didn’t tell his lawyer about that and then filed for bankruptcy. His home, owned free of all secured claims other than a few minor judgment liens, is to be sold and he is forced from it. This story is creating a national outcry, as described in this article. The debtor’s wife died recently from cancer and the debtor too has cancer. Due to his dishonesty the debtor is losing his home and his bankruptcy discharge. It’s an awful story about a tragedy that didn’t need to happen.
Honesty is the lynchpin of the bankruptcy system. Discharge and protection from creditors are powerful privileges, made possible by a debtor’s complete and accurate disclosure of his assets and debts, income and expenses. When a debtor refuses to disclose assets there is a subversion of the process. When this vet lied on his schedules, he gave up any right he had to receive the benefits from the bankruptcy system.
In truth, this debtor should never have filed his case. In the first instance, he has a $250,000 homestead exemption under Montana law. Had he not committed perjury on his bankruptcy schedules he never would have had to lose his home. He could have lived out the rest of his life peacefully.
As far as the creditors who were hounding him for the $109,000 in credit card and medical bills? He could have settled with the loudest of them by liquidating small amounts of the $66,000 and paying them accordingly. I believe he could have transferred the money to a trusted relative and then in three years filed a bankruptcy case. This is the kind of careful planning that is essential any time a person is considering a bankruptcy case.
