When a bankruptcy petition is filed, a debtor must sign a Declaration Concerning Debtor’s Schedules which states:
“ I declare under penalty of perjury that I have read the foregoing summary and schedules, consisting of __ sheets, and that they are true and correct to the best of my knowledge, information, and belief.”
For some reason, people frequently sign legal papers without reading them carefully – or at all. Not reading what you sign is like not wearing a seat belt – most of the time this does not result in a problem, but when it does create a problem, the problem can be quite destructive.
In a recent decision, Larkin v. Raineri (In re Larkin) 2015 U.S. Dist. LEXIS 41561, the United States District Court affirmed the decision of the New Jersey Bankruptcy Court which denied Larkin a bankruptcy discharge pursuant to 11 U.S.C. § 727 (a)(4)(A). The Bankruptcy Court concluded that when Larkin filed her Chapter 7 Bankruptcy Petition she had falsely declared that all of the information in her Petition was true.
Ordinarily, if a bankruptcy petitioner is found to have willfully made a false statement on a bankruptcy petition, there is really nothing to talk about, and certainly nothing to litigate. But Larkin’s case was different. It was not that she had made a false statement on her Bankruptcy Petition – the problem was that she had not made any statement at all.
“Justin M. Pinck, Esq. (“Pinck”) originally represented Larkin in her bankruptcy action. Larkin testified that prior to her bankruptcy filing she met with Pinck, made full disclosure of all her financial information, and was instructed to sign her bankruptcy petition in blank. Larkin admitted to signing her bankruptcy petition in blank but stated that Pinck filed the petition without her knowledge and then disappeared. Over a year after the filing, Larkin received a complete copy of the petition her attorney filed.”
Pinck’s “creative” methods resulted in his license to practice law being suspended by the Supreme Court of New Jersey. But this did not help Larkin. Although she claimed that the information she had given Pinck was complete and accurate, the information on the Bankruptcy Petition filed on her behalf by Pinck was not. Reduced it its essentials, the Court decided that even if Larkin was telling the truth about having given Pinck complete and accurate information: “[A] debtor cannot, merely by playing ostrich and burying his [or her] head deeply enough in the sand, disclaim all responsibility for statements which [s]he has made under oath.'”
This blog is not intended as legal advice and is provided solely to provide information. Those individuals and businesses facing serious debt problems should immediately consult with an experienced attorney to better understand their rights and obligations under the law.