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Sam Calvert


I recently came across another case that reinforces the importance of

being accurate when you fill out your bankruptcy papers. For background, when you file bankruptcy, you must complete a list of assets, and give values. Then you must sign the papers “under penalty of perjury”. By doing so, you swear that everything in them is true, including that your forms are a complete listing of all of your property, income, and debts.

The case I saw involved a person who had filed bankruptcy and listed

his household contents as being worth $9,000.00. Several years later he had a fire which apparently was a total loss. He filed a claim with his insurance company for $300,000 of household contents (really!).

The insurance company hauled out his bankruptcy papers and refused to

pay the claim on the basis of “judicial estoppel”. “Judicial estoppel” is a situation in which you have two separate legal proceedings. In the first legal proceeding, you take a certain position — in the case, I am talking about, that the household contents were worth $9,000. But in a later case, you take a different position — that the household contents were worth over $300,000.

The insurance company was able to convince the court that there was no

way on earth that the person had $9000 and only a few years later had $300,000. The claimant tried to argue that he’s bought a lot of stuff after filing bankruptcy, but his income during the years was not enormous. So, the insurance company got out of paying the claim.

Now, I think it is true that the Goodwill retail price of household

goods is a lot slower than the replacement cost. As I was writing this I looked at the Goodwill site and saw that I could buy a “Global guitar” for $8.95; a similar one from the Walmart site was $99.95. But the jump from $9000 to $300,000 was just too much for the court to accept.

Even worse than having an inaccurate value, however, is omitting

something. There are lots of cases in which a person has a valid lawsuit claim and “forgets” to list the claim in their bankruptcy papers. The person against whom the lawsuit would be brought can often convince the court to say: “If you didn’t list the claim in bankruptcy, you can’t pursue it after bankruptcy.”

And, if you deliberately hide property or omit assets or omit

important information about your financial affairs, in a worst-case scenario you could be prosecuted criminally for bankruptcy fraud.

The moral of this story: Try to be accurate when you estimate the

value of the things you own when you are filling out your bankruptcy petition. That’s why we meet, in person, by phone or by Zoom, to discuss these issues.

Feel free to call me at (320) 252-4473

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