Sonoma County and North Bay folks -- indeed, everyone - considering bankruptcy might take a moment to consider what happened to one debtor who lied on his petition.
Sydney Peters was an art dealer who lied on his Chapter 7 bankruptcy petition. As personal property, he listed "art" and said he had about sixteen pieces worth more than $2,500. He didn't describe the art or provide any details about it. His statement (it's a sworn statement under penalty of perjury) was a lie. The trustee's investigation ultimately found the art consisted of paintings, serigraphs, and other reproductions.
In denying the discharge, the Texas Bankruptcy Court found that Peters was an art dealer who had knowledge of the market value of his art, and that even if he didn't intentionally misstate the value of the art ...
he made inadequate effort to determine the value of the individual pieces of the art, though he was well-acquainted with readily available resources from which he could have provided better estimates of value.
Making things worse, he also lied at the 341a Meeting of Creditors, telling the trustee he had "9 or 10 pieces" and sticking to the $2,500 valuation. Making things much worse, he actually attempted to sell one of the pieces for $4,700 shortly after filing for bankruptcy.
It's not nice to lie to the bankruptcy court. In fact, it's reason to bar your discharge under section 727 0f the bankruptcy code. In fact, it's enough to send you to jail for up to 5 years under 18 USC section 152.
