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30
Jul
2020

Nondischargeable Debt: Chapter 13 Bad Faith Filing

In this case, debtor filed a Chapter 13 case which sought to discharge, among other debts, an obligation that was previously held nondischargeable in a Chapter 7 bankruptcy filed several years earlier.
 
The debt that was found to be nondischargeable in the Chapter 7 case was due to a check written by the debtor on a closed account. In that case, the court found that it was:
 
. . . obvious the debtor intended to deceive the creditor and obtain merchandise with a worthless check, a check incapable of being honored by the bank.
 
Subsequent to the Chapter 7 bankruptcy, debtor filed this Chapter 13 case: the Bankruptcy Code permits repetitive bankruptcy filings when the Chapter 13 case is filed after the Chapter 7 petition.

The issue in this Chapter 13 case was whether the debtor filed the case in good faith. A determination of good faith can only be found by an examination of the totality of the circumstances.

In this case, several factors resulted in this court ruling the Chapter 13 petition was filed in bad faith, including that debtor represented his income as being very low, while previously representing to his insurance company that he had a substantially higher income.

The court found that there was a series of misrepresentations made by the debtor, beginning with the debt that resulted from the worthless check; debtor’s credibility was impugned and the Chapter 13 case was dismissed as having been filed in bad faith. In re Frank Kuriakuz, 155 B.R. 454.

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Thursday, July 30th, 2020 at 4:33 am and is filed under Bankruptcy, National. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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