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Filing for bankruptcy solely with the intent to stop litigation is grounds for the dismissal of the bankruptcy. She’d need to demonstrate that her distress is m

Filing for bankruptcy solely with the intent to stop litigation is grounds for the dismissal of the bankruptcy. She’d need to demonstrate that her distress is mostly defined by action other than the litigation—also, costs with respect to the criminal case probably can’t be used to justify bankruptcy.

rhino369 7y ago
But does that same rule prevent bankruptcy after getting a final judgement. She's going to get hit with a 200 million dollar judgement. But she doesn't have 200 million dollars. I assume, at that point, she can declare bankruptcy.
- manigandham 7y ago
  Well it can be paid over time. There are other convicted scammers with giant restitution amounts that they just keep paying until they die.
  - voxic11 7y ago
    You obviously can't discharge criminal restitution in bankruptcy. You can discharge civil judgements in most cases, but intentional fraud can be non-dischargable if the creditor files a adversary proceeding. I guess if they won the criminal case they would have a much better chance of arguing to the bankruptcy court that it wasn't intentional fraud.
throwawayjava 7y ago
So, here's what I sincerely don't get: why is she allowed to spend a bunch of money on her criminal defense while there are civil cases working their way through the courts, and after she's basically admitted she doesn't have enough money to defend herself in both cases? I understand it would be probably unconstitutional to delay criminal proceedings until after the civil proceedings. But can't the judge in the civil proceedings do something to prevent all the money from being spent on her criminal defense? It seems morally wrong that someone can commit fraud and then spend the money obtained via that fraud defending themselves against the state before having to settle up with the people who they defrauded.
- chrisweekly 7y ago
  Upvoted to counterbalance the downvotes for what I perceive as a legit question
  - throwawayjava 7y ago
    Oh, pretty much every single comment I make gets at least one immediate downvote as soon as I post. I assume I got in a flamewar with the wrong person some years back or something. Don't really care about internet points on VC-sponsored forums, but it'd be nice to get an answer to this question from someone who knows something about law, though, so thanks :)
    - potiuper 7y ago
      It seems like bot(s) that is/are attempting to prevent other users from getting the ability to downvote/500 points. Flaw with hn and disincentive to post here.
      - heyflyguy 7y ago
        I hop you're right, I've been taking that very personal!
      - tempestn 7y ago
        Perhaps this sort of unfounded conspiracy theorizing simply attracts legitimate downvotes.
        throwawayjava 7y ago
        Perhaps, alhtough "person who you get an an argument with intermittently downvotes you posts" isn't exactly a "conspiracy theory". It's just a thing that does happen in internet communities, and that anyone who has moderated one has experience mediating. But, it's best to be certain! To ensure my downvotes are truly deserved: my bet is on the temporarily embarrassed millionaires taking offense to the last sentence of my prior post ;-) (i.e., /s :) )
c3534l 7y ago
Does it matter? Either she spends all her money to get out of jail and ends up penniless or she spends all her money on the civil case and ends up both penniless and in prison. The court can order her to pay up all they want, but you can't squeeze blood out of a stone.
- yitchelle 7y ago
  I see what you did there...
onetimemanytime 7y ago
Better to be dirt poor with courts judgements than be dirt poor with judgments--and a 20 year jail sentence. Either way she is broke and even if she has 50 lawyers in the civil case, she might still lose. So she's playing it smart.

rhino369 7y ago

But does that same rule prevent bankruptcy after getting a final judgement. She's going to get hit with a 200 million dollar judgement. But she doesn't have 200 million dollars. I assume, at that point, she can declare bankruptcy.

manigandham 7y ago
Well it can be paid over time. There are other convicted scammers with giant restitution amounts that they just keep paying until they die.
- voxic11 7y ago
  You obviously can't discharge criminal restitution in bankruptcy. You can discharge civil judgements in most cases, but intentional fraud can be non-dischargable if the creditor files a adversary proceeding. I guess if they won the criminal case they would have a much better chance of arguing to the bankruptcy court that it wasn't intentional fraud.

throwawayjava 7y ago

So, here's what I sincerely don't get: why is she allowed to spend a bunch of money on her criminal defense while there are civil cases working their way through the courts, and after she's basically admitted she doesn't have enough money to defend herself in both cases? I understand it would be probably unconstitutional to delay criminal proceedings until after the civil proceedings. But can't the judge in the civil proceedings do something to prevent all the money from being spent on her criminal defense? It seems morally wrong that someone can commit fraud and then spend the money obtained via that fraud defending themselves against the state before having to settle up with the people who they defrauded.

chrisweekly 7y ago
Upvoted to counterbalance the downvotes for what I perceive as a legit question
- throwawayjava 7y ago
  Oh, pretty much every single comment I make gets at least one immediate downvote as soon as I post. I assume I got in a flamewar with the wrong person some years back or something. Don't really care about internet points on VC-sponsored forums, but it'd be nice to get an answer to this question from someone who knows something about law, though, so thanks :)
  - potiuper 7y ago
    It seems like bot(s) that is/are attempting to prevent other users from getting the ability to downvote/500 points. Flaw with hn and disincentive to post here.
    - heyflyguy 7y ago
      I hop you're right, I've been taking that very personal!
    - tempestn 7y ago
      Perhaps this sort of unfounded conspiracy theorizing simply attracts legitimate downvotes.
      - throwawayjava 7y ago
        Perhaps, alhtough "person who you get an an argument with intermittently downvotes you posts" isn't exactly a "conspiracy theory". It's just a thing that does happen in internet communities, and that anyone who has moderated one has experience mediating. But, it's best to be certain! To ensure my downvotes are truly deserved: my bet is on the temporarily embarrassed millionaires taking offense to the last sentence of my prior post ;-) (i.e., /s :) )

c3534l 7y ago

Does it matter? Either she spends all her money to get out of jail and ends up penniless or she spends all her money on the civil case and ends up both penniless and in prison. The court can order her to pay up all they want, but you can't squeeze blood out of a stone.

yitchelle 7y ago
I see what you did there...

onetimemanytime 7y ago

Better to be dirt poor with courts judgements than be dirt poor with judgments--and a 20 year jail sentence. Either way she is broke and even if she has 50 lawyers in the civil case, she might still lose. So she's playing it smart.