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'Housewives' star bankruptcy drags on

The first of the "Real Housewives" reality television stars to seek bankruptcy protection, Teresa Giudice, recently discussed the effect her Chapter 7 bankruptcy has had during an episode of the show. The woman and her husband had filed joint bankruptcy requests, which stipulated that each person's assets be considered separately.

Giudice's husband's case was settled after he invoked his Fifth Amendment rights in relation to his assets. He had been questioned in court about his financial holdings and potentially concealing assets, according to local media outlets. His wife's bankruptcy proceedings are still continuing.

The woman says that bankruptcy has made her marriage stronger, but she is ready for the ordeal to conclude. She wants to pay her creditors, according to her legal team, but proposals submitted to the U.S. bankruptcy trustee and the Chapter 7 trustee have not been accepted. The U.S. trustee had filed suit last year to make sure that the woman could not have any of her debts discharged. That suit was successful, and so the woman will be subject to a debt restructuring plan.

The case might have been held up by efforts to sell property and goods belonging to the couple. That effort is ongoing through a limited-liability company, according to the couple's legal representatives, and the process is likely to take a long time. Attorneys say they do not anticipate that the woman will be able to conclude her bankruptcy petition this year.

At least three other "Real Housewives" stars have since had to seek bankruptcy protection. It's important to learn from these cases the value of responsible budgeting, so that one can avoid bankruptcy. If you do have to file, it's important to be honest about all assets and debts that you have in order to avoid a bankruptcy fraud investigation.

Source: Wall Street Journal, "Bankruptcy made us stronger, Teresa Giudice says," Stephanie Gleason, June 18, 2012.

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