- Citation:
- In re Ruben, No. 14-1475 (7th Cir. Dec. 23, 2014)
- Tag(s):
-
- Ruling:
- AFFIRMING the district court's reversal of the bankruptcy court's order, the Seventh Circuit Court of Appeals held that the district court was correct in denying the discharge of Ruben’s debt for $171,504.54 in costs imposed by the arbitration panel. The balance must be struck so that post-bankruptcy acts on the part of the debtor cannot be undertaken with impunity. This follows from the general principle that only liabilities arising from pre-petition acts are discharged in bankruptcy.
- Procedural context:
- The bankruptcy court refused to enter an order requiring debtor to pay plaintiff $171,504.54 that arbitrators had ordered him to pay, and entered summary judgment in favor of debtor. Plaintiff appealed to the district court, which reversed and entered summary judgment in favor of plaintiff. This appeal ensued.
- Facts:
- After initiating an arbitration action against debtor, plaintiff filed an adversary complaint in the bankruptcy court opposing discharge of debtor's fraud-based debt to her, pointing out that a debt incurred in order to perpetrate a fraud is not dischargeable. The arbitration panel ordered debtor to pay a total of $171,504.54 in arbitration fees and costs advanced by plaintiff. Plaintiff amended her complaint to include the arbitration fees and costs as part of the alleged non-dischargeable debt. Debtor argued that a debt incurred after his debts have been discharged in bankruptcy (but that he wouldn’t have incurred but for a prepetition claim) was itself a prepetition claim, and was therefore discharged if the prepetition claims against him had been discharged.
- Judge(s):
- BAUER, POSNER, and TINDER, Circuit Judges.
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