Financial situation leads to criminal charges for one celebrity

Managing your financial situation can be a real struggle for many Americans, including those living in Mississippi. It can be difficult to make and stick to a budget in order to account for living expenses and savings. Some legal tools can fortunately help individuals struggling with debt to get a handle on their finances and get a fresh financial start. Tools such as filing for Chapter 7 bankruptcy can only be effective, however, if properly used.

One celebrity is experiencing the potential consequences that may arise when an individual is not forthcoming about financial matters during the bankruptcy process. Federal authorities recently charged Teresa Giudice of the Real Housewives, as well as her husband, with nearly 40 counts of money fraud. The couple faces 50 years in prison for the combined sentences of all of these charges. Some of the charges stem from the fact that the couple allegedly did not disclose all of their financial information when filing for Chapter 7 bankruptcy in 2007.

The law is clear that individuals who file for Chapter 7 bankruptcy must be entirely forthcoming about their financial situation. Bankruptcy offers a way for individuals with overwhelming debt to possibly discharge their debts or develop a payment plan to manage payments on debts. The process expects individuals to be honest about their financial situation in order to craft the best possible solution.

Just like in any other situation, when individuals are not honest or attempt to hide their assets, they may be subject to inspection and criminal charges. While there is no hard and fast rule that people who file for bankruptcy will be subject to an audit, an audit may be more likely in situations where people are paid in cash. If, upon further inspection, it becomes apparent that the people are hiding assets, they may then face criminal charges for fraud.

Bankruptcy can be a powerful, helpful tool. However, it can also lead to serious penalties if those engaging in the bankruptcy process are not honest. The law demands such honesty and authorities may further inspect a situation if there is any doubt about an individual's financial disclosures. The story about the Real Housewives' star reminds those contemplating bankruptcy about the importance of being truthful.

Source:, "'Real Housewives' Teresa Giuidice and husband face prison for tax evasion," Heather Tooley, July 29, 2013

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