Legal Blog: #RHONJ Teresa Giudice’s $90k Lexus SUV — The Rights & Collection Options of Creditors Owed

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You cannot get blood from a stone unless the stone is a $90,000+ plush new Lexus SUV. The Real Housewives of New Jersey star, Teresa Giudice, and her spouse, Joe Giudice, owe creditors approximately $14 million, so the appearance of a luxury Lexus in her Towaco, New Jersey driveway – a recent gift from hubby Joe Giudice – is suspicious. When it comes to debtor-creditor disputes, the courts must intercede. Let the legal analysis over “Lexusgate” commence!

The reality is, what Joe did by purchasing a posh automobile wasn’t in and of itself illegal. Nevertheless, the buying or lease of a Lexus, unlike a Ford Focus, will certainly interest New Jersey probation officers and investigators with the US Attorney’s Office, who will want to know who owns the vehicle and who paid for it.


The cookbook author was just released from the Danbury Federal Correctional Institution in Connecticut, where she had been serving time since Jan. 5. Last year, United States Bankruptcy Court judge Donald H. Steckroth wrote, “The case of the above named debtor(s) is closed.” On September 29, 2014 the judge denied the Giudices’ bankruptcy discharge. Therefore, they have to find a way to repay all of their creditors in the amount of $13,480,263.11. 

Teresa and Joe have reportedly already started repaying creditors to the tune of $7,500. Their trustee attempted to get the debt erased by filing discharge papers, but Judge Steckroth denied the request. They owe what they owe, as if they had not fought bankruptcy. They are completely stuck with their debt.

Financial crime doesn’t pay. The couple’s outstanding debts include $5.4 million to Wachovia, $1.3 million to Dime Savings Bank, money to North Hudson IVF fertility clinic, payment to the New Jersey Division of Taxation, and more than $386,000 to the Internal Revenue Service, according to reports. They also owe funds to credit card companies and several contractors Joe worked with in his construction business. 

READ: Analysis of How The Giudice Theft Affects Us All — They Stole From More Than Banks! 

(The Giudices have allegedly paid more than half of the $414,588 they owe the feds in court-ordered restitution for conspiracy and fraud. The Giudices are on a restitution payment schedule that is meant to only leave them with money for food, housing, and other necessities.)

In the ideal secured transaction, the debtor fulfills its obligation to the secured party by making timely payments. Frequently, however, the debtor defaults on its payments and the creditor is forced to repossess the collateral in which he/she has a security interest. 

Creditors, to help repay the Giudices’ debt, could very well seize the 2016 Lexus LX570 as well as file lawsuits in New Jersey small claims court. Here’s how:

  • Creditors could get a writ of execution on the Giudices’ personal property and wages. The writ of execution allows creditors to get to the defendant-debtor’s money in bank accounts, personal property like jewelry, art, and designer handbags, as well as motor vehicles. Wage garnishment allows the creditor to receive a percentage of the judgment-debtor’s paycheck until the court-awarded amount is paid in full. 
  • Creditors could also levy the Giudices’ bank accounts and place a lien against their real property. Once a creditor’s judgment is recorded, the Giudices cannot sell with clear title any real estate they own in New Jersey until the judgment is paid.
  • The Giudices must leverage their fame to pay their debts, and creditors should realize the reality star’s celebrity is the key to repayment. Debtors can be arrested and jailed for failing to respond to court hearings, pay legal fines, or show contempt of court in connection with a creditor lawsuit. Could Teresa and Joe serve more jail time if they neglect to pay their debts? Yes, although the creditors would much prefer the Giudices remain free. Laws allow for the arrest of someone for an unpaid debt. Few debtors realize they can land in jail simply for ignoring debt collection legal matters.  Nevertheless the fact is the Giudices are worth more out of jail than in. They can make money through The Real Housewives of New Jersey, book deals, personal appearances, etc. Creditors want them pounding the pavement, not waxing jailhouse floors. 
  • If the Giudices negotiated and then contracted to repay creditors, and they breached said contract, they could be sued for breach of contract.

I recently spoke to the Vice President of a commercial bank regarding this case. As a finance expert with 30+ years experience, he relayed to me the fact that “Creditors can try, through the court system, to petition the court and show that the debtor has additional assets that could be liquid cash and thusly, they are in a position to service their debt.”

Teresa Giudice_RHONJ_Welcome Home

An interesting tool at the creditor’s disposal is a deposition. Creditors can conduct depositions to determine the location of assets. The Giudices would have to be forthcoming with describing where their assets are hidden. If they lie, and the falsehood is material, they could be charged with perjury. Perjury, under New Jersey law, occurs when an individual intentionally makes a false statement under oath. This includes making a false statement at a deposition or making false statements to police or authorities. Perjury is a third degree crime in New Jersey. That means the Giudices could face 3-5 years in prison and a fine of up to $15,000 if convicted of perjury.  

Moreover, creditors could pursue fraudulent transfers of funds. If the judgment debtor transferred assets to a third party in an effort to conceal them from creditors, a lawsuit may be filed against the party holding the property for the judgment debtor. Who do you think might be helping the Giudices bury assets, if at all?

Remember, too, the amount owed has fines and interest attached. The total owed therefore can balloon quite quickly. In rare instances, the interest owed could be more than the debt to a specific creditor. Usually, when a creditor obtains a judgment against the debtor, it includes interest on the amount (principal) of the judgment. Interest will start to accumulate on the date the judgment was entered by the court. That interest will continue to accrue until the judgment is paid in full.

Teresa Giudice's New Jersey home

The fact is creditors should not have difficulty collecting judgments, especially here where the debtor has wages that can be garnished and assets they can go after. Joe and Teresa Giudice are going to be in debt for a long time. “Lexusgate” doesn’t change that but it does cast a shadow over their ability to control their finances and prioritize purchases in light of the debt they owe to a myriad of creditors.

Grab your gavel, join the conversation, and let us know what you think about “Lexusgate” and the best way creditors can go after the Giudices’ assets.


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