A California Chapter 7 bankruptcy fraud case involving former New York Mets star Lenny Dykstra has resulted in a three-year prison sentence.
Orange County Chapter 7 Bankruptcy Attorney Vincent Howard understands that this case involved Dykstra's reported attempts to loot his own property, following his Chapter 7 bankruptcy filing.
Now, Dykstra is an extreme example, but this case is important to examine because you need to know that bankruptcy trustees and judges take it very seriously when someone attempts to conceal assets to protect it from seizure in a bankruptcy.
The truth is, you can usually keep most of your major property in a bankruptcy. Of course, everyone's situation is going to vary, but trying to hide assets by either putting them in secret accounts or giving them to relatives or simply failing to disclose them is usually going to result in severe consequences.
If you're upfront with your Orange County bankruptcy attorney, we can often find ways to help you keep your property.
Here's what we know of this case, as reported by The Los Angeles Times:
Dykstra, like many Americans, was initially a victim of the housing bubble burst - albeit on a grander scale. He purchased a home in the swanky Sherwood Country Club from hockey great Wayne Gretzky at the height of the bubble for more than $18 million.
The housing market tanked, as did the value of Dykstra's home, which was reportedly very lavishly furnished.
In an effort to try to save the home and his belongings, he filed for bankruptcy in the summer of 2009. At the time, he was battling with a number of creditors, and despite his best efforts, the home was sold in 2010 by one of those creditors, a private equity firm.
Now typically in a Chapter 7 bankruptcy, your assets will be frozen, meaning you can't touch them in case there is a possibility that they can be sold in order to repay your creditors.
But Dykstra didn't want to let go of that property - or at least the value of it - so he started selling it. In fact, he apparently sold everything - including a $50,000 kitchen sink.
The bankruptcy trustee had warned him not to do this, and yet he moved forward with it anyway. He reportedly took a truckload of $400,000 worth of assets - mirrors, chandeliers, artwork, a clock and a stove - to a consignment store, where the owner paid him cash.
He also squirreled away property from his office at Camarillo Airport, and tried to sell several items on EBay and Craigslist - leaving an Internet trail of these transactions.
Ultimately, Dykstra agreed to a plea deal that will allow him to serve 3 years for those crimes. It's not yet clear if that will run concurrently with the sentence he received for grand theft auto and filing a false financial statement in a separate criminal case.
Orange County Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.