By Guest Blogger: Paul B. Porvaznik, Esq.
When you file for bankruptcy, you sign sworn schedules that itemize your assets. If you fail to fully disclose or update your asset summary, you risk a creditor objecting to your discharge on the basis of fraud. Another peril of nondisclosure concerns claims that arise after the bankruptcy filing; like future lawsuits. So, what happens if a claim develops after you file your bankruptcy petition but before you are granted a discharge and you don’t inform the bankruptcy court of this claim? That’s the question examined in Schoup v. Gore, 2014 IL App (4th) 130911 (4 Dist. 2014), a case that will doubtless serve as a cautionary tale for future bankruptcy petitioners.
In Schoup the debtor filed in 2010 and obtained a discharge in 2012. Several months into the case the debtor was injured on private property, giving rise to a premises liability claim. The debtor didn’t tell the bankruptcy court or trustee of the premises suit until after his bankruptcy case was discharged. Indeed, after obtaining his discharge the debtor filed that claim. The property owners moved for summary judgment on the basis of judicial estoppel, arguing that the plaintiff’s failure to disclose the suit as an asset in his bankruptcy barred the post-discharge action entirely. The trial court agreed and the plaintiff/debtor appealed.