"Octomom" Chapter 7 Bankruptcy Dismissed by Judge

June 1, 2012,

Pink_octopus_chalk_drawing.jpg Nadya Suleman, known in the media as the "Octomom," recently filed for Chapter 7 bankruptcy protection, claiming up to $1 million in debt owed to twenty-one creditors. Her petition gave her a court-ordered respite from an impending foreclosure action, but it was short-lived. A bankruptcy judge dismissed Suleman's case two weeks after she filed it for failing to submit several required documents. Her house remains in her possession, but its future is uncertain.

The bankruptcy court dismissed Suleman's pro se petition on May 15, 2012, fifteen days after she filed it. She did not file a dozen required schedules and exhibits with her petition listing assets and liabilities, and identifying secured and unsecured debts. The court attached a notice to her petition listing the missing documents and giving her fourteen days to cure the defect. Since a Chapter 7 bankruptcy involves using a debtor's available, non-exempt assets to pay debts and liabilities, a complete accounting of assets is essential to the case. Likewise, a bankruptcy cannot proceed without a full schedule of liabilities, identifying both priority and nonpriority debts. The ultimate goal of a Chapter 7 bankruptcy is to discharge the debts that cannot be satisfied with the debtor's non-exempt assets.

Suleman became a celebrity of sorts in January 2009 when, via in vitro fertilization, she gave birth to octuplets. This gave rise to the nickname "Octomom." The public's positive reaction turned sour several weeks after the births, when more of her story came to light. She already had six children and was living on public assistance, raising questions for some as to whether she should seek medical assistance to bear further children. Suleman defended her decision to undergo in vitro fertilization, but she has continued to struggle financially. She has sought out various means of bringing in money, including several high-profile jobs ranging from the strange to the prurient.

Her home in La Habra, California has been the subject of a foreclosure action for some time. She reportedly purchased the home in an unusual deal. The deed is in her name, and she must make mortgage payments. The seller, however, remains primarily responsible for payments on the mortgage. He has complained that, by failing to make payments on the mortgage, Suleman has damaged his credit rating. The bankruptcy case, with its automatic stay, allowed Suleman a brief reprieve from foreclosure. The case's dismissal lifted the stay, but the foreclosure company has delayed the sale several times. Currently, the sale is scheduled for June at the La Habra City Hall, where reporters have reportedly vastly outnumbered prospective buyers on prior scheduled auction dates.

Suleman's bankruptcy petition offers a bare-bones view of her requested relief. She claims total assets of $50,000 or less and liabilities of at most $1 million. She identifies twenty-one creditors, including the seller of her home and the mortgage company. The petition does not specify which debts are secured and which are unsecured, nor does it provide a breakdown of her claimed assets. Without these and other key pieces of information, the court was required to dismiss the case.

Boston bankruptcy attorney Dmitry Lev, with over fifteen years of experience in the financial business, guides people through the often complex and stressful process of personal bankruptcy. Contact Mr. Lev online or at (617) 556-9990 to set up a free and confidential consultation.

Web Resources:

Voluntary Petition (PDF), In Re: Natalie Suleman, U.S. Bankruptcy Court, Central District of California, April 30, 2012

Order and Notice of Dismissal for Failure to File Schedules, Statements and/or Plan (PDF), In Re: Natalie Suleman, U.S. Bankruptcy Court, Central District of California, May 15, 2012

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