Follow New Jersey Bankruptcy Laws Carefully
After being served with more than 43 lawsuits, Harold P. Cook III, a former municipal court judge in New Jersey, filed bankruptcy to absolve his $10 million debt. His accusers say that he violated many ethical guidelines, including:
- Transferring ownership of a vacation home to his wife to keep it from being repossessed
- Failing to disclose a loan company’s lack of financial resources to investors
- Engaging in “fraudulent conduct” to avoid obligations to his creditors
- Making political contributions that violate the judicial code of conduct
- Failing to show up for depositions or return phone calls about charges
Cook owned portions of nearly 50 companies and was involved in many real estate transactions. The lawsuits, along with his failure to disclose these lawsuits to judicial officials, led to his disbarment and wage garnishment. He provided loans for these companies, which later defaulted on the loans. He now owes millions of dollars to several banks.
Why Did This Businessman File for Bankruptcy?
In October 2014, Cook filed Chapter 11 bankruptcy to absolve the $10 million in debts incurred by his ethically questionable business practices. This situation might have been resolved sooner if Cook had filed bankruptcy beforehand, instead of resorting to underhanded techniques and shortcuts to avoid paying his debts.
Chapter 11 is a common form of business bankruptcy, but it is also available to individuals in certain circumstances. It allows people with debts to restructure their financial obligations and pay off portions of what they owe.
According to the New Jersey Law Journal, Cook may have filed his claim incorrectly. He did not list the 20 unsecured creditors who he owes the most money to, and he did not provide certain information about his current financial estate. He requested an extension so he could retain the services of a different bankruptcy attorney. One of his former attorneys said that Cook finally filed bankruptcy as a last resort after “economic circumstances” failed to improve. Previously, he had absolved $1.5 million of unsecured debt with a payment of $25,000.
What Do I Need to Know About Filing for Bankruptcy?
There are three main lessons we can glean from this story:
- Bankruptcy does not need to be a last resort. By waiting for the economy to improve on its own, Cook allowed his debt to grow larger and larger.
- Obey the regulations. Cook may have hurt his case by failing to include all the relevant information.
- Hire a reputable attorney. Cook’s first lawyer did not help when he failed to recognize that one of his creditors had undergone a change in ownership.
To learn which type of bankruptcy might be best suited for your situation, contact a bankruptcy lawyer in Morris County, New Jersey to learn more about Chapter 7, Chapter 13, Chapter 11 and debt settlement.