Elements of Fraud of Creditor
November 20, 2012 12:34 PM Subscribe
What are the elements of a "fraud of creditor" defense in Chpt 13 bankruptcy case?
posted by Flood to law & government (24 answers total) 2 users marked this as a favorite
I am contractor / small business owner. I have a small claims court judgement against a former customer, for $4,044.44.
The former customer is now filing Chpt 13 bankruptcy in Federal Court. This former customer is dishonest person (and that is generous assessment of his character).
We did a job for him at his business - and we realized afterwards that he did this construction work with the intent of burning everyone. Plumbers, carpenters, HVAC, electricians - everyone involved got burned.
I was crafty enough to sue him personally - but everyone else got burned when he collapsed his corporation. I have evidence that he never intended to pay anyone. I also have evidence that the corporation just changed names, but never really went out of business. (Some of the same owners, same business, same location, same name on the sign out front - just under a new corporate name).
I also have evidence that he has started and collapsed (due to insolvency) 7 corporations in the last 5 years. He has a series of court cases against him for failure to pay on a contracts. He has a criminal fraud judgement against him. He filed chpt 8 bankruptcy 2 years ago.
The current chpt 13 bankruptcy case is in Central Florida. He is doing this to save his personal home from fore-closure. In Central Florida right now, these cases are like going through a mill. Things are being rubber stamped and passed along. I attended a pre-trial hearing about this case, and saw the mill first hand.
I don't think that I will ever get my money - but I hate the idea of the Federal Bankruptcy Trustee helping him to cover his debts even more. I got the court papers showing his debts - the fee for his bankruptcy lawyer is more than he owes me.
I am sure that he was not expecting me to fight this. But I am a bit more savvy than the average contractor. I have already filed my judgement with the court as proof of a claim against him.
I am not going to throw good money after bad money - so, I will not be hiring a lawyer. However, I will be going to the creditors meeting, and arguing that my debt should not be discharged.
Can anyone tell me the elements of proving a "fraud of debtor" defense in Chpt 13? I think they might be:
1. misrepresentation by debtor
2. debtor's knowledge of misrepresentation
3. intent to decieve
4. justifiable reliance by creditor
5. damage to creditor
I think I can show all these elements. Are they correct? Am I good if I can show these 5 things? Am I missing anything?
I know you are not my lawyer, and I know that I am probably in over my head trying to argue my own case in Federal Court - but I determined to try. If nothing else, it will make me feel better knowing that I tried.
Any help or thoughts will be greatly appreciated.