Reality Star Teresa Guidice Caught in Financial Pickle

You don’t have to be a financial wizard to understand that you shouldn't go on lavish shopping sprees just days after you file bankruptcy papers. While that goes for everyone, it’s especially true for celebrities who are likely to be recognized.

Teresa Giudice, age 38, might not be a big star, but her face appears regularly on the reality show The Real Housewives of New Jersey. Now she and her husband Joe, a real estate investor, are in debt to the tune of nearly $11 million against an annual income of $79,000. The debt is from unpaid mortgages, hefty credit card bills, and renovations, according to People magazine.
 
Last October the Giudices filed for Chapter 7 with the U.S. Bankruptcy Court in Newark, New Jersey. A few days later, the New York Post reported that they went on a shopping spree that cost them nearly $54,000. The bender included $8,800 for curtains, and $45,000 for wall hangings, mirrors, frames, tables, urns, and chairs.
 
Those are just some of the reasons why the trustee overseeing the bankruptcy asked the judge to deny their bankruptcy petition. Roberta A. DeAngelis filed a complaint because of what she called falsehoods and omissions in the couple’s bankruptcy paperwork. Significant among the omissions was the $250,000 book deal Giudice signed one week before the bankruptcy filing. DeAngelis also maintains that the Giudices have filed false tax returns.
 
Teresa Giudice and her husband are bristling at the attention that is being paid to their financial situation. After a court appearance, Joe Giudice yelled at New York Post reporters who asked questions, telling them, “None of your business! Back off before I get pissed!”
 
The New York Daily News reported that Teresa has been repeatedly mocked on the show by fellow stars for her part in creating the financial stress.
 
Teresa defended the bankruptcy when she appeared on ABC’s The View in August, telling the audience that she was only spending money she thought she had. Her husband, she said, had hidden the mounting debt from her to keep her from worrying.
 
“I always live within my means. Always. The money was coming in from the apartment buildings so we were able to live the lifestyle we did,” she said.
 
She told US Weekly magazine that the financial dilemma they find themselves in is not unusual. “Due to the economy, most of my husband’s real estate ventures failed despite his hard work and effort. As a result, we looked to the bankruptcy court for a fresh start.”
 
In recent days, the New York Daily News reported that Giudice is demanding that her $3,000-per-episode salary on Real Housewives be doubled if they want her to return. Rather than attributing their problems – and the negative attention – to lavish spending, she seems to be blaming the Bravo Network that produces Real Housewives.
 
An auction of the contents of the Giudices Towaco 10,000-square-foot mansion was to be held in last month. Among the items to be sold were a grand piano, two flat-screen TVs, a steel snow plow, a suit of armor, an oversized wall mirror, a jet boat, an antique-style pool table, a decorative urn, framed paintings, and a foosball table. However, a New Jersey court has postponed the auction until October 3in order to reassess the value of the items.
 
Related articles:

You may like these other stories...

Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...
A new Gallup survey found that 58 percent of smokers in the United States see increased state and federal taxes on cigarettes as an act of unjust discrimination, while 39 percent believe the tax hikes are justified.The...
Liberal groups object to bill barring taxes on Internet accessThe Internet Tax Freedom Act hasn’t been a controversial bill. In fact, it’s so popular that senators are seeking to pair it up with a far more...

Upcoming CPE Webinars

Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.