semi Beezley-related interpretation question
Posted: Sun Apr 08, 2012 8:34 pm
Sent from my iPhone
On Apr 8, 2012, at 1:09 PM, "Mark J. Markus" wrote:
> Sorry...which of my questions are you answering "no" to?
>
>
> On 4/8/2012 11:36 AM, Dennis wrote:
>
>> No. No more than you could say that about the loss of a 523 complaint.
>>
>> Sent from my iPhone
>>
>> On Apr 7, 2012, at 8:55 PM, "Mark J. Markus" wrote:
>>
>>> Thanks Nick and Dennis. Let me change the facts a bit to better highlight my question.
>>>
>>> Let's say there was no breach of promise action. The creditor filed solely a fraud action in state court. Then let's say creditor loses on the fraud action. Is (was) that clearly a violation of 524 for which the debtor then do an OSC for contempt in the Bk court? Or, is the creditor protected merely because it was a fraud allegation?
>>>
>>> *************************
>>> Mark J. Markus
>>> Law Office of Mark J. Markus
>>> 11684 Ventura Blvd. PMB #403
>>> Studio City, CA 91604-2652
>>> (818)509-1173 (818)509-1460 (fax)
>>> web: http://www.bklaw.com/
>>> This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://www.bklaw.com/bankruptcy-blog/20 ... efinition/)
>>> ________________________________________________
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>>>
>>> On 4/7/2012 4:21 PM, Nicholas Gebelt wrote:
>>>>
>>>> Dear Mark,
>>>>
>>>>
>>>>
>>>> If the unscheduled debt was incurred through fraud, then the holding in Beezley is that it was not discharged. However, it seems to me that there are three options you should consider as a way to perhaps make the debt dischargeable, and therefore discharged.
>>>>
>>>>
>>>>
>>>> First, the debtor could file a complaint under a combination of 523(a)(3)(B) and Fed. R. Bankr. Proc. 4007(b) to get a determination of dischargeability. Nothing in Rule 4007(b) restricts the filing of such a complaint to the creditor. If you win, the debt is discharged. Of course, you have to incur the costs and attorneys fees to get the determination, so a cost/benefit analysis is necessary before proceeding down this path. Moreover, there is no a priori guarantee of victory, so you might end up throwing money into the wind.
>>>>
>>>>
>>>>
>>>> Second, you could fight the state court action. If you win, then there is no debt to discharge. Moreover, if the creditors action was genuinely without merit, after winning you could sue the creditor for filing a frivolous suit in the first place. This approach also has the drawback of upfront costs and attorneys fees, without any guarantee of recovering them if there is a subsequent suit for frivolous prosecution. And once again, you might lose. In addition, this approach may take much more time to resolve, as the state courts are very backed up these days.
>>>>
>>>>
>>>>
>>>> Third, you could file the OSC motion without mentioning the specific state court causes of action - a sort of generic OSC motion - and hope that it dissuades the creditor from continuing the state court action. Best case scenario: you settle before the hearing on the OSC motion. Worst case scenario: the creditor correctly appeals to the holding in Beezley, or the judge, sua sponte, applies Beezley and sanctions you for filing a meritless OSC motion. The success of this third approach obviously depends on the bankruptcy law sophistication, or lack thereof, of the state court action attorney. The fact that the pending state court action has a breach of promise cause of action thrown in suggests that your opponent is unaware of Beezley, since under Beezleys holding that debt was discharged.
>>>>
>>>>
>>>>
>>>> I had a case a few years ago in which a state court attorney blew the 60-day bar (inapplicable in your case, of course) by staying a state court action without filing a 523(c) action in the bankruptcy court. The attorney had a serious lack of bankruptcy law knowledge, which worked to my clients advantage.
>>>>
>>>>
>>>>
>>>> Let me know how things pan out.
>>>>
>>>>
>>>>
>>>> Nick
>>>>
>>>>
>>>>
>>>> Nicholas Gebelt, Ph.D., J.D.
>>>>
>>>> Certified Bankruptcy Specialist
>>>>
>>>>
>>>>
>>>>
>>>>
>>>
>>
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Sent from my iPhoneOn Apr 8, 2012, at 1:09 PM, "Mark J. Markus" <bklawr@yahoo.com> wrote:
Sorry...which of my questions are you answering "no" to?
On 4/8/2012 11:36 AM, Dennis wrote:
No. No more than you could say that about the loss of a 523
complaint.
Sent from my iPhone
On Apr 7, 2012, at 8:55 PM, "Mark J. Markus" <bklawr@yahoo.com>
wrote:
Thanks Nick and Dennis.
Let me change the facts a bit to better highlight my
question.
Let's say there was no breach of promise action. The
creditor filed solely a fraud action in state court. Then
let's say creditor loses on the fraud action. Is (was) that
clearly a violation of 524 for which the debtor then do an
OSC for contempt in the Bk court? Or, is the creditor
protected merely because it was a fraud allegation?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web:
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