Opinion
No. 78 B 4248
May 18, 1979
Debts Not Affected by Discharge — False Pretenses — Credit Card — Intent To Deceive
A bankrupt's credit card debt was dischargeable where the creditor failed to prove that the debt was created with a specific intent to defraud.
The bankrupt had purchased more than $1800.00 worth of goods with a credit card in May, 1978, which was the month preceding her bankruptcy. However, the bankrupt stated that she intended at all times to repay her indebtedness. Further, she stated that she had first contemplated bankruptcy in June of 1978 upon her attorney's advice.
The bankrupt presented rebuttal proof that she had no intent to defraud the creditor. For example, the bankrupt had extraordinary expenses during May, 1978, these involved car repairs and the purchase of ordinary household goods in anticipation of her family's move into her living quarters. In addition, there was no evidence that the purchases were made for resale or were incurred for pleasure as a "last fling" before bankruptcy.
In order to prove a violation of Section 17a(2) of the Bankruptcy Act, noted the court, the creditor must show an intentional wrong.
Although the bankrupt was improvident, observed the court, the creditor failed to prove that the debt was created with specific intent to defraud. Thus, the court held that the creditor had not satisfied the burden of proof required by Section 17a(2). See Sec. 17a(2) [§ 523(a) (2)] at ¶ 9228.