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Drug Dealing Debtor Keeps Discharge - Santa Rosa Bankruptcy

drug money-thumb-275x206-27396.jpgA couple was arrested with possession of and trafficking in heroin and crack cocaine after receiving a Chapter 7 discharge. What is that? It is an elimination of debts as if they never existed. A "discharge," when granted by the Court, terminates all liability for repayment, all obligations, rights and duties associated with the claim.

The U.S. Trustee (UST) attempted to prove that wife and debtor Lisa Shiloh, illicitly sold drugs and profited from doing so in order to revoke her discharge. The debtor was found guilty on six counts of delivery of a controlled substance, one count of criminal conspiracy, four counts of criminal use of a communication facility, and one count of child endangerment.

The UST used evidence documents from the criminal trial that revealed the amount of drugs and the frequency of the purchases but there was no proof of the amount of money Lisa allegedly accrued from the sale of drugs up until the filing of her Chapter 7 petition.

The court said there was testimony regarding the sale of drugs but the UST did not prove that Lisa derived income from the transactions during the prepetition period. The court noted that the state needed to prove only that the debtor sold drugs, not that she earned income from doing so, which they didn't. The moral of the story, even criminals can receive a discharge.

The Law Offices of James V. Sansone is located in Santa Rosa, California and serves clients with theirbankruptcy and criminal defense needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.

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