“Real Housewives” stars Joe and Teresa Giudice aren’t out of hot water yet. According to a trustee’s final report, the couple still owes $13.4 million to creditors — and that’s after filing for bankruptcy. Bankruptcy satisfied just $7,500 of their current debts, NJ.com reported Wednesday.
Teresa and her husband filed for bankruptcy in 2010. Their piling debts, they claimed, were a direct result of the recession and ensuing losses from Joe’s construction company. It is not altogether unusual that filing for bankruptcy did not erase the stars’ debts. Chapter 7 bankruptcy removes select debts only. Claimants are still responsible for money owed to the government, such as overdue taxes and student loan payments. The couple did not rely on bankruptcy alone.
“When John Sywilok, their court-appointed trustee, alleged that the couple had hid assets and income, Joe Giudice in 2011 invoked the Fifth Amendment against self-incrimination and agreed to a settlement in which the court denied discharge of his debts,” NJ.com explains. “His wife later followed suit.” In a rare twist of fate, however, filing bankruptcy — in their particular case — may have been their undoing.
The bankruptcy resulted in ongoing investigations and charges (pending) of financial and bankruptcy fraud. “It was a terrible decision to file for bankruptcy. They might have gotten away under the radar otherwise,” attorney Ronald LeVine tells NJ.com. “Joe Giudice faces a recommended sentence of 37 to 46 months, while Teresa Giudice faces up to 27 months,” the news site continues. Courts will make a final decision on July 8.