The Cost of Defiance: Giuliani, Contempt, and the “Average Debtor” Reality Check

Rudy Giuliani is the gift that keeps on giving when it comes to bankruptcy law, although it’s likely a nightmare for his own counsel. We are witnessing one of the most public downfalls in American history: from the “America’s Mayor” to a defendant facing sanctions for contempt of court.

I have said many times that Giuliani’s cases are perfect examples of the intersection between bankruptcy, civil law, and procedure. After his Chapter 11 case was dismissed, most likely to avoid a Chapter 11 Trustee gaining total control over his finances, he is now finding out that the civil collection process can be just as unforgiving. There’s a lesson in Giuliani’s case for every debtor.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on February 14, 2026.

The Professor’s Audio Briefing.

The “Shell Game” of Assets

Giuliani owes $148 million to Ruby Freeman and Shaye Moss because of a judgment in their defamation case. In the collection phase of any lawsuit, you have to show your cards. But Giuliani hasn’t been playing by the rules. From missing watches to a “lost” Joe DiMaggio jersey, the excuses are piling up.

The Professor’s Tip: In my book on consumer bankruptcy law, I discuss the issues of debtors and missing or transferred assets. If any of my average clients tried to tell a judge they “lost” a primary asset or skipped an inventory deadline, they wouldn’t just be fined, they would be in an orange jumpsuit.

Contempt: Willful vs. Accidental

Contempt isn’t just about “forgetting” a court date. It requires a hearing to decide if the violation was willful.

The Child Support Analogy: If you lose your job and can’t pay child support, that’s one thing. Clearly, a parent missing a child support payment in that situation violated the court order. However, what if the parent has the money and just refuses to pay? That’s the difference between being in contempt and willful contempt.

The Giuliani Standard: Giuliani’s lawyers claimed he was too ill to travel for his hearing, yet he was spotted at Mar-a-Lago. This creates a massive credibility gap that any lawyer will tell you will affect your case moving forward. When Judge Beryl Howell requires an affidavit stating you haven’t traveled in 30 days, she is putting Giuliani into the perjury corner.

A Tale of Two Systems: Giuliani vs. The Average Debtor

This is where it gets real for the rest of us. If an average person tries to hide assets from the U.S. Trustee, the hammer comes down hard.

Scenario	The Average Debtor	The “Giuliani” Experience
Hiding Assets	Federal felony referral (18 U.S.C. § 152).	“I’m looking into it.”
Skipping Discovery	Immediate dismissal or jail time.	Exceptional judicial patience.
Travel Excuses	Requires medical documentation.	Spotted at high-profile events.

The U.S. Trustee Program is the “watchdog” of the bankruptcy system. For a typical debtor, concealing even a small bank account can lead to a Denial of Discharge, meaning you stay in debt forever.

Professor’s Tip: The U.S. Trustee’s Office is known to randomly pick bankruptcy filings and dig deeper with inquiries. While it amounts to nothing, it still requires additional documentation. The US Trustee might also appear at the 341 meeting of creditors. Of course, none of this happened in Giuliani’s case.

What’s Next for Giuliani?

Since a monetary fine is pointless for someone who already owes $148 million and has frozen accounts, Judge Howell is left with one real option: Incarceration. She has shown remarkable patience, but even the most patient judge eventually runs out of road.

As a professor, I’ll be watching this hearing closely to see if “America’s Mayor” is finally treated like “America’s Average Debtor.”

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