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Bankruptcy, what bankruptcy?

Exactly two years after filing bankruptcy in 2009, to the tune of $11 million in debt, Joe Giudice withdrew his bankruptcy filing on Monday in a New Jersey court.

The NJ Star-Ledger was the first to break the shocking news regarding the Real Housewives of New Jersey star. So why did Joe abandon his bankruptcy bid? Well it all has to do with the accusations levied against him and his wife Teresa Giudice by their bankruptcy trustee John Sywilok.

About a year after they initially filed, the trustee accused them of hiding assets, and concealing income amongst other things. The Giudices were accused of concealing assets including three vehicles, a boat, properties in Hillside, the family pizzeria, a laundromat and apartments. Teresa was also accused of hiding income including a $250,000 advance she received for her bestselling book “Skinny Italian.”

While in court, Joe abandoned his quest to have his millions of dollars in debts forgiven in federal bankruptcy court. The Ledger reports the change of heart came after he invoked his Fifth Amendment rights against self-incrimination during questioning by the trustee for his creditors about assets, income and business interests he is accused of hiding from the court.

The judge signed off on the settlement between Joe and the trustee. The court order reads, “The defendant Giuseppe Giudice acknowledges his desire to resolve the matter without the need for further inquiry or litigation, and without making any further admissions.”

However, the agreement signed by Joe does not apply to Teresa. Though it’s likely Teresa, who has been raking in the dough since filing bankruptcy, will end up dong the same.

So why did Joe make this decision? More than likely to avoid future criminal prosecution. Joe and Teresa were scheduled to face trial over the bankruptcy fraud leveled against them. If they had been found to be in the wrong during that trial, the next steps would have been a criminal case.

“They are really cracking down on bankruptcy fraud,” said bankruptcy lawyer Leonard C. Walczyk. “It is a real hot issue.”

So to sum this up, Joe is now responsible for millions of dollars of debt while Teresa’s bankruptcy case is still working its way through the court system. The trustee is still opposing her discharge of debt. A bankruptcy lawyer reveals Joe would still be responsible for their joint debts even if a judge absolves Teresa’s liability.

As stated, it’s likely Teresa will end up following in Joe’s footsteps, you know, if she wants to avoid criminal prosecution and/or prison.

Photo credit: Steven White / Splash News

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