Teresa Giudice Bankruptcy

One step forward, two steps back in the designer shoes Teresa Giudice couldn’t afford but bought on credit she never intended to repay… a federal judge has decided to reopen the Real Housewives Of New Jersey star’s $13.5 million dollar bankruptcy case.

The reason Teresa spent a year in prison, and the reason Joe Giudice is currently behind bars, is the result of being found guilty of bankruptcy fraud. Shortly before Teresa got locked up, a judge decided to close their bankruptcy, meaning Teresa and Joe were liable to repay their creditors. 

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Despite pleading guilty to forging loan applications and lying to the IRS, Teresa and Joe then filed a $5 million dollar malpractice lawsuit against their former bankruptcy attorney James Kridel. With that suit pending, an attorney for Teresa’s creditors, appointed by the bankruptcy court, sought to reopen Teresa and Joe’s bankruptcy case in order to secure any potential award to satisfy their outstanding creditors. 

Despite how bad this looks, Teresa isn’t in trouble, nor is she being accused of anything nefarious. The argument is over how to distribute any speculative winnings Teresa may receive if she’s successful in her suit against James Kridel. Basically, the case is being reopened so the judge can look at who’s been paid, who hasn’t, and what is owed, but also to determine a timeline (aka sequence of events) of James Kridel’s actions in Teresa and Joe‘s filing. 

Teresa attempted to block the reopening by insisting she paid off or is in repayment plans with 27 of her 29 outstanding creditors, including the $551,563 tax lien placed against her by the IRS last year.

However, U.S. Bankruptcy Court Judge Stacey L. Meisel argued, “There may have been a satisfaction of a number of creditors but the fact remains that creditors still exist. Satisfied means paid in full in my book.” BOOM! BLOOP! 

At stake now is any award Teresa may receive from the malpractice case, which could go towards repaying outstanding creditors instead of lining the very plush wallet inside one of Teresa’s designer purses. The judge did not specify if this would or would not be the case.

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NJ.com reports that Teresa‘s current attorney insisted her lawsuit addresses Kridel’s actions after she and Joe filed for bankruptcy. They blame him for failure to report assets and income on the filing, which was the basis for the fraud case.  Thus these assets should not be considered part of her financial estate at the time of their filing (which would form the basis for her repayment plans).

Teresa‘s attorney declared that after spending a year in prison her “emotional scars run deep” and she has suffered personally – as have her four beautiful daughters – with lost business and income, plus being a felon as a result of Mr. Kridel‘s actions, therefore she shouldn’t be required to suffer further punitive damages by sharing her malpractice settlement. 

In turn, the prosecution argued that Teresa and Joe’s lawsuit against Mr. Kridel pre-dates the initial bankruptcy filing (this is confusing to me?) and therefore creditors should be allowed a bite from any chunk of change Teresa may receive. The attorneys will likely decide how the assets are to be divided, with the judge rendering the ultimate decision.

Oh, and in case you’re wondering, Mr. Kridel filed a motion to dismiss the lawsuit against him, but was denied. Giudices Vs. Kridel will likely find its way to trial early next year.  

Sigh… will Teresa ever just take ownership, pay her bills, and get the hell out of court? She and Sheree Whitfield are a special breed of denial that needs its own scientific study. 

Also, Teresa did not appear in court. 

TELL US – DO YOU AGREE WITH THE JUDGE’S DECISION?

[Photo Credit: Tommy Garcia/Bravo]

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