Dale Armstrong

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
IN RE:
DALE ARMSTRONG
DEBTOR 	CASE NO. 07-2308-8-JRL
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ORDER
This case is before the court on the trustee’s objection to the debtor’s exemptions and the
trustee’s motion for turnover. On September 25, 2007, the court conducted a hearing on this
matter in Wilmington, North Carolina.
On June 27, 2007, Mr. Armstrong filed for relief under Chapter 7 of the Bankruptcy
Code. On the date of his Chapter 7 petition, the debtor maintained two bank accounts at
Wachovia Bank, N.A. He held a balance of $3,102.98 in his Wachovia checking account and a
balance of $570.03 in his Wachovia savings account. These balances totaled $3,673.01 as of the
petition date. On Schedule B, filed with the Debtor’s petition, the Debtor represented under
penalty of perjury that only $260.00 was held in his Wachovia accounts. The debtor again
represented at the § 341 meeting of creditors that his schedules were true and correct and that he
had scheduled all of his property. At the hearing, the trustee presented two exhibits to support
SO ORDERED.
SIGNED this 05 day of October, 2007.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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his motion for turnover of property. Exhibit A, which was authenticated at the hearing by the
debtor, is an ATM receipt printed on June 27, 2007, showing a balance of $3,102.98 in the
debtor’s Wachovia checking account. The trustee also presented a Wachovia savings account
statement, marked as Exhibit B, which showed that the debtor had a balance of $570.03 in his
Wachovia savings account on June 30, 2007. The trustee contends that the debtor failed to
disclose $3,413.01 ($3,673.01 representing the actual balance of the debtor’s two Wachovia
accounts, less the $260.00 disclosed balance). The trustee asserts that this undisclosed balance is
property of the estate which the debtor failed to schedule, and therefore the trustee is entitled to
an order requiring the debtor to turn over and deliver to the trustee funds in the amount of the
undisclosed bank balance.
The trustee also objects to the debtor’s claim of exemptions in his bank balances with
Wachovia Bank, to the extent that these balances were not originally scheduled by the debtor.
The debtor held $3,673.01 in his Wachovia bank accounts on the petition date, yet the debtor
represented under penalty of perjury in his petition that he held only $260.00 in those accounts.
The trustee asserts that the debtor only scheduled and claimed an exemption in the bank balances
after the trustee discovered the true balances. The trustee requests that the debtor not be
permitted to amend his exemptions to claim an exemption in the bank balances. The debtor
asserts that his earlier failure to be accurate as to the Wachovia Bank account balances on his
petition was done in ignorance, and not with the intent to deceive the trustee. The debtor has
since amended his petition in accordance with the statements received from Wachovia since the
date of the debtor’s Chapter 7 petition.
Property of the bankruptcy estate includes “all legal or equitable interests of the debtor in
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property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). A debtor in a Chapter 7
case is required to prepare a schedule of assets and liabilities, which must be filed with the
petition or within 15 days thereafter. Bankr. R. 1007(b)-(c). Further, Bankruptcy Rule 1008
requires that this schedule “be verified or contain an unsworn declaration as provided in 23
U.S.C. § 1746.” Bankr. R. 1008. Here, the debtor failed to disclose the accurate amount of funds
contained in his two Wachovia bank accounts in his schedules filed with his Chapter 7 petition.
Regardless of the whether the failure to disclose was intentional or due to ignorance or oversight,
the court finds that the debtor had $3,673.01 in his Wachovia bank accounts at the time of filing
the Chapter 7 petition. This property was not disclosed on the debtor’s schedules and no
exemption in the property was claimed at the time of filing, and no justifiable reason has been
provided for this omission. The money is therefore property of the bankruptcy estate, and the
$3,102.98 in undisclosed funds should be turned over to the Chapter 7 trustee.
Based on the forgoing, the trustee’s motion for turnover and objection to exemption is
ALLOWED. The debtor is directed to turn over to the Chapter 7 trustee the $3,102.98 in
undisclosed funds that were in the debtor’s Wachovia bank accounts at the time of filing his
Chapter 7 petition.
“END OF DOCUMENT”
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