《楊清泉律師專欄》ARE CASH ADVANCES TAKEN BY UNEMPLOYED DEBTOR BANKRUPTCY FRAUD (Part 2)?
楊清泉律師事務所
《楊清泉律師專欄》ARE CASH ADVANCES TAKEN BY UNEMPLOYED DEBTOR BANKRUPTCY FRAUD (Part 1)?
In Re May， creditor alleged that its claim for $5，583 was excepted from discharge pursuant to Section 523(a)(2). Debtor incurred the debt by taking cash advances on his credit card while he was unemployed. In his case， a presumption against discharge existed with regard to a substantial portion of the debt. At trial， debtor testified that he worked at a saw mill and ran a painting business during the saw mill’s off-season. Every year， the saw mill laid him off during the winter and rehired him in the summer. In late 2008， debtor was unable to work because it was the mill’s slow season and he was experiencing trouble with his knees and one shoulder. He decided to have knee surgery and rest during the off-season. He intended to return to work at the saw mill and resume his painting business. Unfortunately， he was unable to return to work， and started receiving disability income. Debtor used cash advances to pay his bills while he was out of work. The minimum payment on the credit card issued by plaintiff was included in the bills debtor paid. “The defendant credibly testified that he intended to have surgery to remove his disability so he could return to work once the saw mill’s business resumed， and pay the debt. Instead， after on surgery， he discovered he needed at least two more， and by then， the economic slowdown prevented the saw mill from rehiring him， contrary to his experience in years past，” the court said. “From his testimony， the court infers that he regarded his minimum monthly payment obligation as part of his other necessary living expenses， such as food， fuel， housing， and transportation expenses which he paid using the proceeds of cash advances. The evidence admitted at trial does not support any finding of ‘kiting’ or ‘Ponzi’ scheme， contrary to Plaintiff’s unwarranted suggestion in its closing brief.” The court not only ruled that plaintiff’s claim was discharged; it concluded that the plaintiff’s position was not substantially justified. The court further said that， “Plaintiff’s meager evidence introduced at trial-bankruptcy schedules and Rule 36 admissions were directed almost exclusively toward establishing debtor’s inability to repay， rather than his intent;” once again differentiating ability and intent to repay.
Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy， business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra， CA 91803.
In Re May， creditor alleged that its claim for $5，583 was excepted from discharge pursuant to Section 523(a)(2). Debtor incurred the debt by taking cash advances on his credit card while he was unemployed. In his case， a presumption against discharge existed with regard to a substantial portion of the debt. At trial， debtor testified that he worked at a saw mill and ran a painting business during the saw mill’s off-season. Every year， the saw mill laid him off during the winter and rehired him in the summer. In late 2008， debtor was unable to work because it was the mill’s slow season and he was experiencing trouble with his knees and one shoulder. He decided to have knee surgery and rest during the off-season. He intended to return to work at the saw mill and resume his painting business. Unfortunately， he was unable to return to work， and started receiving disability income. Debtor used cash advances to pay his bills while he was out of work. The minimum payment on the credit card issued by plaintiff was included in the bills debtor paid. “The defendant credibly testified that he intended to have surgery to remove his disability so he could return to work once the saw mill’s business resumed， and pay the debt. Instead， after on surgery， he discovered he needed at least two more， and by then， the economic slowdown prevented the saw mill from rehiring him， contrary to his experience in years past，” the court said. “From his testimony， the court infers that he regarded his minimum monthly payment obligation as part of his other necessary living expenses， such as food， fuel， housing， and transportation expenses which he paid using the proceeds of cash advances. The evidence admitted at trial does not support any finding of ‘kiting’ or ‘Ponzi’ scheme， contrary to Plaintiff’s unwarranted suggestion in its closing brief.” The court not only ruled that plaintiff’s claim was discharged; it concluded that the plaintiff’s position was not substantially justified. The court further said that， “Plaintiff’s meager evidence introduced at trial-bankruptcy schedules and Rule 36 admissions were directed almost exclusively toward establishing debtor’s inability to repay， rather than his intent;” once again differentiating ability and intent to repay.
Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy， business and civil litigation and has handled more than four thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra， CA 91803.
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