National Consumer Bankruptcy Rights Center

Protecting The Rights Of Consumer Debtors In Bankruptcy

dischargeability

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No Issue Preclusion Where Verdict Could Have Been Based on Negligence

The element of “willful and malicious injury” in the discharge exception under section 523(a)(6) could not be established by issue preclusion where the state court judgment could have been based on negligence. Gerard v. Gerard, No. 14-1496 (7th Cir. March 12, 2015). [Read more…] about No Issue Preclusion Where Verdict Could Have Been Based on Negligence

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Agent’s Fraud Does Not Lead To Nondischargeability

When a debt is the result of fraud may the debtor still discharge it if he was not complicit in the fraud? What if the fraudulent actor was an agent of the debtor? Judge Posner of the Seventh Circuit answered both questions in the negative. Sullivan v. Glenn (In re Glenn), No. 14-3213 (7th Cir. Apr. 2, 2015). [Read more…] about Agent’s Fraud Does Not Lead To Nondischargeability

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It’s Alive! – McCoy Adopted by Tenth Circuit

The Tenth Circuit has concluded that late-filed tax returns are not “returns” for dischargeability purposes unless filed by the IRS in cooperation with the debtor. Mallo v. IRS (In re Mallo), __ F.3d __, 2014 WL 7360130 (Dec. 29, 2014) (consolidated with In re Martin, 14-1488). [Read more…] about It’s Alive! – McCoy Adopted by Tenth Circuit

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Pre-Bankruptcy Agreement Not To Discharge Debt Unenforceable

A debtor’s agreement prior to filing bankruptcy not to discharge her debt for attorney’s fees was found to be unenforceable under section 523(a)(2) and for public policy reasons. Ziegler v. Kline (In re Kline), No. 14-12815, Adv. Proc. No. 14-227 (Bankr. E.D. Pa. Nov. 20, 2014). [Read more…] about Pre-Bankruptcy Agreement Not To Discharge Debt Unenforceable

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Arbitration Judgment Applies to Determination of Nondischargeability

The doctrine of collateral estoppel mandated that findings in a state court arbitration judgment applied to the determination of nondischargeability of a debt in chapter 7 bankruptcy. Margolis v. Hensley (In re Hensley), No. 12-42785, Adv. Pro. 12-4180 (Bankr. E.D. Tex. Oct. 1, 2014). [Read more…] about Arbitration Judgment Applies to Determination of Nondischargeability

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Ongoing Homeowners Association Assessments Dischargeable

Approximately a year and a half after the debtors abandoned their condominium and stopped paying their homeowners assessments, they filed for chapter 13 bankruptcy. Their plan proposed to transfer title to the secured creditor, Bank of America, and made no provision for payment of ongoing Homeowners Association assessments. Both the bank and the HOA objected to confirmation of the plan. The bankruptcy court sustained the Bank’s objection but denied the HOA’s and confirmed the plan insofar as it did not include payment of ongoing HOA assessments. In re Coonfield, No. 14-2533 (Bankr. E.D. Wash. Sept. 25, 2014). [Read more…] about Ongoing Homeowners Association Assessments Dischargeable

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Bankruptcy Court Takes Compassionate View of Default

The evidence showed that the debtors’ breach of contract and conversion of collateral was not willful and malicious for purposes of nondischargeability under section 523(a)(6). Mountain Am. Credit Union v. Trujillo (In re Trujillo), No. 13-12434, Adv. No. 13-1095 (Bankr. D. N.M. July 3, 2014).  [Read more…] about Bankruptcy Court Takes Compassionate View of Default

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Debt for Fees Related to Incarceration of Minor Not Dischargeable

A Bankruptcy Appellate Panel for the Ninth Circuit found that debt based on expenses incurred by the county juvenile justice system for the care of the debtor’s son while incarcerated is nondischargeable Rivera v. Orange County Probation Dept. (In re Rivera), No. 13-1476 (B.A.P. 9th Cir. June 4, 2014). [Read more…] about Debt for Fees Related to Incarceration of Minor Not Dischargeable