First Jail, Then Bankruptcy for Madoff

He's already sitting in jail and will likely spend the rest of his days there, but it's now safe to assume that Bernie Madoff will have a harder time getting a good rate on a credit card should he ever be freed.

Madoff is nearly bankrupt.

As expected, lawyers for several victims of Madoff's Ponzi scheme filed a petition on Monday to force Madoff into involuntary bankruptcy. A federal judge ruled late last week that the petition would be allowed, reversing his decision last December to block such suits for fear that they would simply slow down the legal process.

With Madoff bankrupt, his personal possessions may be seized and used as recompense for the victims' losses, which total $64 million. The trustee overseeing the liquidation of Madoff's business has already recovered $1 billion in assets both in the U.S. and abroad. A Madoff bankruptcy would make it easier to use his foreign assets such as his French chateau and Caribbean investments to pay back his victims.

Madoff's attorney has 20 days to respond to the petition.