Bankruptcy Law Blog

Wednesday, February 24, 2016

HGTV’s Kitchen Cousins File for Bankruptcy

Can debts incurred by fraud be discharged in bankruptcy?

We’ve all seen them. Home improvement shows in which a contractor or decorator comes in to transform a person’s house into his or her dream home. Just turn on HGTV and you will most likely find one playing right now. What seems like a dream come true, however, can become a nightmare if the renovation or redecoration is botched. In this situation, the contractor or decorator may be liable, but what if he or she doesn't have the money to pay the judgment? Well, that is where the bankruptcy court comes in, as they did in a case involving a notable pair from HGTV.

The Kitchen Cousins, John Colaneri and Anthony Carrino, are well known for transforming kitchens on HGTV. Earlier this year, however, an arbitrator found that they had botched a renovation and that they were liable to the owners for $860,000. Some of the damages were increased because the arbitrator found that certain consumer fraud laws had been broken during the renovation process. 

Four days later, the cousins filed for bankruptcy. The owners of the home then decided to file a claim with the bankruptcy court asking for the debt to be considered nondischargeable. They claim that the debt was incurred by fraud and that the cousins should be held liable for it. It seems that the cousins have begun preparing for the worst-case scenario by liquidating some of their assets.

When a debt is incurred by fraud, it may be deemed nondischargeable by the bankruptcy court. In order for a court to determine whether the debt should be paid, the creditor must file a claim with the court. It is then in the hands of the court to decide whether the debtors should be released from liability or whether they should be forced to repay the debt. It is worth noting that just because fraud has been found by another court, it does not mean that the bankruptcy court will find that fraud existed. The bankruptcy court must make its own decision in the case.

If you are contemplating bankruptcy, you shouldn’t do so alone. Contact a Mobile and Baldwin, Alabama bankruptcy attorney today. 

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