UPDATE: Teresa Giudice Chapter 7 Bankruptcy Updates

teresa giudice joe

Remember when Teresa Giudice filed for bankruptcy to the tune of $13.5 million dollars… all those long years ago after the first season of Real Housewives of New Jersey?  Well, Teresa’s bankruptcy is finally settled!

Teresa has pretty much moved in at the courthouse, which I suppose is better than a jail cell, because Teresa and Joe returned to court to finally discharge their Chapter 7 filing of which there were 45 claimants. 

“The case is fully and properly accounted for as provided by law. The trustee hereby requests to be discharged from further duties as a trustee,” the trustee, John W. Sywilok stated in court documents.


“All estate bank statements, deposit slips, and canceled checks have been submitted to the United States Trustee.”

The trustee had already agreed to let the Giudices keep their Towaco home, since they owe more on the house than it is worth and selling it would not net enough cash to satisfy a significant portion of debt. They were also able to keep several luxury vehicles including a 2007 Cadillac, Kawasaki Quad and a 2005 Maserati.

In order to satisfy some of their debts, the Giudices sold off $15,000 worth of household goods and furniture. Teresa and Joe had already been paying back a significant portion of the debts, mainly related to faulty business real estate investments and credit card debts. Some of the original items declared in the filing were previously rescinded, but it was too late as federal investigators had already began looking into their accounts. 

The case is still pending final approval from the judge, but they are expected to sign off very soon, reports Radar Online. 

The Giudices return to court later this month (September 23rd) for sentencing on their federal fraud indictment, which included a charge for bankruptcy fraud

UPDATE: One of our commenters, CeeJay, alerted us that the original report we quoted for this story is inaccurate. It seems that although the Giudices have received a determination from their trustee, which will be submitted to a judge, the situation is far from over. We admit that we inaccurately reported the original information, and apologize. 

According to NJ.com, who is privy to court information, the Giudices STILL owe their creditors a whopping $13.5 million and creditors have the right to seek repayment from the couple. Basically it is as if Teresa and Joe had never tried to file at all in the government’s eyes. 

Teresa and Joe received a temporary reprieve from creditor action against them while their federal indictment was ongoing, but now that the couple has plead guilty and is due to stand for sentencing, creditors have every legal right to come after their money! 

As for their bankruptcy trustee, MrSywilok has been trying to “satisfy” the Giudices creditors, and will not be discharging their debts. His original plan was use the Giudices homes and possessions, but “they were mostly financed to the hilt.” His second course of action was to secure $15,000 from the couple, which was obtained by selling household goods and furnishings,  instead of outright seizing their assets. Most of that $15,000 went towards bankruptcy administration fees and court costs! 

Currently the Giudices owe: $5.4 million to Wachovia Bank, $1.7 million to the Community Bank of Bergen County, $1.3 million to Dime Savings Bank, more than $500,000 to the New Jersey Division of Taxation, and more than $386,000 to the Internal Revenue Service. 

Basically despite being able to temporarily save their homes, Teresa and Joe are STILL on the hook for a massive amount of money  – and that does not include the restitution they will owe to the federal government after they are sentenced! Even worse – they’re unable to file for bankruptcy against those debts for the next seven years. 

Ronald LeVine, a bankruptcy attorney unconnected to the Giudices case weighed in on the couple’s situation, “They’re completely stuck with their debt. They are going to owe whatever they owed, as if they had not fought bankruptcy.”

Just for the record, Teresa plead guilty not to outright fraud, but to lying under oath during her bankruptcy filing and for concealing her assets. She faces 27 months in prison on 4 counts.  

[Photo Credit: Instagram]