- Case Type:
- Case Status:
- 18-60394 (5th Circuit, Feb 07,2019) Not Published
- Individual debtor was barred by doctrine of judicial estoppel from suing to enforce alleged loan she made to certain individuals based on her failure to disclose the loan in her prior bankruptcy case.
- Procedural context:
- Debtor filed chapter 7 bankruptcy in 2010 and did not disclose a loan made to other individuals as an asset in the bankruptcy case. The chapter 7 trustee subsequently brought an adversary proceeding against the debtor to deny a discharge under section 727(a)(2)(A), (a)(4)(A), and (a)(5). After a trial, the bankruptcy court sustained the objection to discharge under 727(a)(5), but found the trustee did not establish fraudulent intent and declined to deny a discharge under section 727(a)(2)(A) or (a)(4)(A). In 2016, debtor brought suit to collect on the loan she did not disclose in her bankruptcy case. The court dismissed the action based on judicial estoppel and the 5th Circuit affirmed.
- In September 2009, debtor received various assets in a divorce settlement, including a $351,550.14 check. In October 2010, she filed for Chapter 7 bankruptcy in the Northern District of Florida. In her original bankruptcy schedules, debtor listed only $6,550 in assets, including a bank account, clothing, a rental deposit, and a car. A few weeks later, she filed amended schedules listing additional assets, but did not include a loan to an individual. In February 2011, the Trustee initiated an adversary proceeding against debtor to deny a discharge for failure to disclose assets in the bankruptcy schedules. After a trial, the bankruptcy court sustained the Trustee’s objection to discharge pursuant to § 727(a)(5) for failure to satisfactorily explain the loss of assets she obtained through her divorce settlement. The court declined to sustain the Trustee’s objection to discharge based on § 727(a)(2)(A) or (a)(4)(A), determining that the Trustee failed to establish that debtor failed to disclose assets with fraudulent intent. In August 2016, debtor commenced an action against an individual in federal district court in Mississippi. She alleged that in September 2009, she orally agreed to loan the individual $251,550.14 with an interest rate of fourteen percent per annum for investment purposes, which was supposed to pay back monthly.
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