Bankr. No.:
05-42297
Adv. No.:
06-4018
Chapter:
7
Date of Decision:
June 1, 2006
Issue:
Whether Plaintiff was entitled to a default judgment of nondischargeability against Defendant-Debtor where Defendant-Debtor did not timely answer but where Plaintiff had pled only under 11 U.S.C. § 523(a)(2)(A) without setting forth specific allegations of fraud excluding statements by Defendant-Debtor regarding her financial condition?
Ruling:
A default judgment was denied. Relief under § 523(a)(2)(A) cannot be premised on a statement by a debtor respecting his or her financial condition. A statement respecting financial condition includes statements regarding a debtor’s ability to pay the subject debt. Here, Plaintiff did not make any allegations of fraud actionable under § 523(a)(2)(A) that referenced anything other than statements by Defendant-Debtor regarding her ability to pay. Plaintiff was given a stated time to file an amended complaint in lieu of dismissal of its original complaint.
Full Bankruptcy Court Decision:
