New Supreme Court ruling about false statements and nondischargeability of debts

The Supreme Court yesterday ruled in their most recent decision Lamar, Archer & Cofrin, LLP v. Appling, 16-1215 (Sup. Ct. June 4, 2018) that a false statement about one’s assets must be in writing to provide grounds for an objection and ruling that a debt nondischargeable under Section 523(a)(2) of the bankruptcy code.

Lamar, Archer & Cofrin, LLP v. Appling, 16-1215 (Sup. Ct. June 4, 2018)

The decision penned by Justice Sonia Sotomayor focused on the plain language of the code.   Sotomayor cited previous case law reiterating  the legislative history as saying that Congress drafted the bankruptcy code Section (a)(2) in a way which was designed to stop creditors who might otherwise trick or trap unsuspecting debtors into making statements that could result in their bankruptcy discharge being denied.  She went on to state that the “statutory language makes plain that a statement about a single asset can be a ‘statement respecting the debtor’s financial condition.’” If the statement was not made in writing, “the associated debt may be discharged, even if the statement was false.”

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Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.

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