Can fraud be discharged from bankruptcy court if there was no intent to commit fraud? 28 Answers as of June 12, 2014

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Stephens Gourley & Bywater | David A. Stephens
Fraudulent claims can be discharged if the debtor can prove there was no fraud committed, assuming there is not a judgment for fraud from another court.
Answer Applies to: Nevada
Replied: 6/12/2014
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
Fraud is not dischargeable. How is it possible to have fraud without intent? Intent is a necessary element of fraud.
Answer Applies to: California
Replied: 6/12/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
fraud, if proven is not dischargeable. AND, if you blow off a state court case and they get a default judgement, that is not dischargeable if they claimed fraud.
Answer Applies to: California
Replied: 6/12/2014
Rhymer Law Firm
Rhymer Law Firm | William Rhymer
It depends on whether there is proof, whether another court specifically ruled there was in fact fraud as defined by the bankruptcy code and whether the creditor wants to fight the discharge. It would be best to talk with a bankruptcy attorney in person and let him or her advise you after hearing the details.
Answer Applies to: Georgia
Replied: 6/12/2014
The Orantes Law Firm
The Orantes Law Firm | Giovanni Orantes
If a Court already adjudged that a debt was incurred through fraud, a creditor can come into bankruptcy court and ask the Court to rule that such debt is nondischargeable and will likely prevail. However, if no Court has decreed that fraud was committed, the creditor would have to come into bankruptcy court to get a ruling from the Bankruptcy court and intent is the biggest factor as to whether the debt is dischargeable. If the creditor cannot prove intent, the Court should rule that it's dischargeable.
Answer Applies to: California
Replied: 6/12/2014
    David R. Fondren, Attorney at Law
    David R. Fondren, Attorney at Law | David R. Fondren
    If there was no intent, that by definition is not fraud. It would be up to the person who claims to be harmed to file a lawsuit in the bankruptcy to determine if it is dischargeable or not. If They fail to do so, the debt, if listed, will be part of the discharge.
    Answer Applies to: Missouri
    Replied: 6/12/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    The plaintiff or moving party bust prove by a fair preponderance of the evidence (that is it is more likely than not) that the defendant made a misrepresentation with intent to deceive or with a reckless disregard of the truth and that the plaintiff relied on the misrepresentation by which he lost money or property.
    Answer Applies to: Minnesota
    Replied: 6/12/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    This is a very difficult issue to litigate as a debtor, because the bankruptcy court uses a lower standard of proof (preponderance of evidence) rather than the "clear and convincing" standard used in criminal cases. So even if you were not found guilty in a criminal case, you cannot be sure the bankruptcy judge will come to the same conclusion. Most debtors do not have the funds to litigate, either, so if it is likely that a creditor will challenge the discharge of a debt on account of fraud, it is probably advisable to attempt to settle the matter without a trial.
    Answer Applies to: Oregon
    Replied: 6/12/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    The creditor has a right to file what is called an adversary proceeding in the bankruptcy court. It is in reality, a separate lawsuit within the bankruptcy court in which the creditor hopes to prove that there was fraud involved in incurring the debt. If the bankruptcy judge agrees, then the debt will be determined to be non-dischargeable. Additionally, if there has already been a ruling in a state court proceeding that a debt is fraudulent in nature that will very likely be given credence and weight in the bankruptcy case when the creditor files an adversary complaint. If you are served with papers for an adversary complaint within a bankruptcy case it is time to seek assistance and hire a lawyer - defending them involves real litigation, evidence, witnesses, discovery, and legal strategy.
    Answer Applies to: Colorado
    Replied: 6/12/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    "Fraud" is a legal conclusion decided by a Judge. If you file BK, the creditor can file an Adversary Proceeding for a court determination that the debt is non-dischargeable because it was incurred by fraud. Fraud claims are very hard to prove, and expensive for the creditor. Normally those get resolved outside of court, for pennies on the dollar. Contact not only a BK lawyer, but a lawyer who handles litigation.
    Answer Applies to: Colorado
    Replied: 6/12/2014
    Danville Law Group | Scott Jordan
    If there is no intent to commit fraud, there can be no fraud. Intent is an element of fraud and must be proved in court. I have tried many of these types of case and have won them all because fraud is very difficult to prove. If you want a more precise opinion on your specific case, I would need more information from you.
    Answer Applies to: California
    Replied: 6/12/2014
    Portland Bankruptcy Law Group
    Portland Bankruptcy Law Group | Christopher J. Kane
    Well, you cannot commit fraud if you did not intend to defraud anybody. An element of fraud is the mental intent to willfully deceive somebody.
    Answer Applies to: Oregon
    Replied: 6/12/2014
    Underwood & Riemer, P.C.
    Underwood & Riemer, P.C. | James D. Patterson
    If a judgment for fraud has been entered by a court, then that is non dischargeable debt.
    Answer Applies to: Alabama
    Replied: 6/12/2014
    Kirby G. Moss PC | Kirby G. Moss
    Fraud is discharged if the defrauded party never objects to the discharge within certain time deadlines within the bankruptcy. Intent wouldn't matter at that point. The defrauded party must be listed with good address in the bankruptcy.
    Answer Applies to: Indiana
    Replied: 6/12/2014
    Hicks, Massey & Gardner, LLP
    Hicks, Massey & Gardner, LLP | Robert M. Gardner, Jr.
    Fraud requires intent by its very nature. Accidents or mistakes are not fraud. Intent is an element which would have to be proven in order to have a debt declared non-diachargeable. Intent can be implied by a person's actions, and it would be up the the Judge to determine intent. If you are in a situation where this is being alleged or even as just a potential issue, you should find an attorney to sit down with before you take another step.
    Answer Applies to: Georgia
    Replied: 6/12/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    I would need more details, but generally, if fraud is involved, the debt is not dischargeable.
    Answer Applies to: California
    Replied: 6/12/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    Fraud is non-dischargeable in bankruptcy, if proven. To prove fraud, one must prove intent. You should speak with an attorney to determine if the elements of fraud can be proven.
    Answer Applies to: California
    Replied: 6/12/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    The bankruptcy court doesn't care whether or not you intended to commit fraud if you acted in a fraudulent way within the time period indicated in 11 USC section 523. See my video on uTube called the five things you must never do if you want to file bankruptcy for more information.
    Answer Applies to: Nevada
    Replied: 6/12/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If the judge ruled on fraud, then your intent is irrelevant but the ruling would be the deciding factor.
    Answer Applies to: New York
    Replied: 6/12/2014
    Idaho Bankruptcy Law | Paul Ross
    It depends. The debt will be discharged unless the creditor brings a non-dischargeability action and can prove the elements of fraud.
    Answer Applies to: Idaho
    Replied: 6/12/2014
    Paul Stuber, Attorney at Law
    Paul Stuber, Attorney at Law | Paul Stuber
    Fraud is not accidental. If a court has a judgment of fraud there had to be intent in the finding. If it is fraud it is most likely not dischargeable.
    Answer Applies to: Colorado
    Replied: 6/12/2014
    The Law Office of M Grater LLC
    The Law Office of M Grater LLC | Mark O. Grater
    As a general rule, fraudulently obtained loans are not dischargeable in bankruptcy if the creditor objects and can prove it was fraud. This proof would generally involve some element of intent.
    Answer Applies to: Connecticut
    Replied: 6/12/2014
    Law Office of Shirly L. Horn | Shirley L. Horn
    There is "actual" fraud and also "implied" fraud. Depending on the issue, intent may or may not be relevant. A consultation regarding the facts is a necessity to answer whether the particular occurrence is dischargeable.
    Answer Applies to: Michigan
    Replied: 6/12/2014
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    It truly depends on the fraud and the circumstances. It is a fact specific question, and will probably be determined by a hearing.
    Answer Applies to: New Jersey
    Replied: 6/12/2014
    David Andersen & Associates PC | Jeremy Shephard
    Debt alleged to have been fraudulent can be filed on in a bankruptcy; however, the creditor could file an adversary complaint (a lawsuit within the bankruptcy) to allege the debt was fraudulent and shouldn't be discharged (meaning you don't get rid of it). You'll want to talk to an experienced bankruptcy attorney about the particulars of your case.
    Answer Applies to: Michigan
    Replied: 6/12/2014
    Timothy Casey Theisen, P.A. | Tim Theisen
    Fraudulently incurred debts are excepted from discharge if the creditor objects and the court finds fraud. Your subjected intent is not that important, if the facts and circumstances lead a reasonable person to conclude that the debtor should have known they were engaging in fraudulent behavior. The real question, is sizing up the likelihood that the creditor will object, determining the likelihood of success which only an attorney can surmise upon after meeting with you, and then deciding whether it's worth a try, particularly if you have other debts that would justify a bankruptcy on your record even if this particular debt wasn't dischargeable.
    Answer Applies to: Minnesota
    Replied: 6/12/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    Look at section 523 of the code
    Answer Applies to: South Carolina
    Replied: 6/12/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Yes, generally there has to be an intent and it has to be maliciously done. However, some fraud, like fraudulent transfers, cannot be discharged. See an experienced bankruptcy attorney about your specific situation.
    Answer Applies to: Michigan
    Replied: 6/12/2014
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