Illinois Bankruptcy Options - Loans, Mortgages & Consolidation

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Loan, Mortgage & Consolidation Sites:

1. Mortgages - refresh.

Recent Notable Opinions of the Supreme Court of The United States:

Archer v. Warner, Docket Number: 01-1418 IN THE SUPREME COURT OF THE UNITED STATES ON PETITION FOR WRIT OF CERTIORARI, Argued January 13, 2003, Decided March 31, 2003. Leonard and Arlene Warner sold the Warner Manufacturing Company to Elliott and Carol Archer. Later, the Archers sued the Warners for fraud related to the sale. This suit was settled. According to the settlement agreement, the Archers released the Warners of all liability except for a $100,000 promissory note. After the suit  was voluntarily dismissed, the Warners defaulted on the first payment due on the note. The Archers then sued the Warners for collection in state court, and in turn, the Warners filed Chapter 7. The Archers objected to the discharge of their note. The Code states a debt shall not be dischargeable "to the extent it is for money obtained by false pretenses, a false representation, or actual fraud." This motion was denied and discharge of liability for payment of the note was granted. The District Court and Court of Appeals affirmed. Held: In a 7-2 opinion, the Court concluded "the Archers' settlement agreement and release of liability may have worked a kind of novation, but that fact does not bar the Archers from showing that the settlement debt arose out of 'false pretences, a false representation, or actual fraud,' and consequently is nondischargeable." If a release of liability is obtained by fraud, the release within the agreement is voidable.

Recent Notable Opinions from Illinois Bankruptcy Courts

In re Sims, Case No. 02-90737, Adversary No. 02-9040, April 6, 2004 before the Illinois Bankruptcy Court for the Central District. After the Sims initiated Illinois bankruptcy in a Chapter 7 proceeding, a creditor objected to discharge alleging fraud based upon the receipt of a large insurance settlement that the Sims spent prior to the date of filing. The Court nevertheless allowed discharge. Pursuant to 11 U.S.C. 727(a)(2)(A) debtors filing Illinois bankruptcy must be denied a discharge where it is found that the debtor, within one year before the date of filing, with the intent to hinder, delay, or defraud a creditor or an officer of the estate has transferred, removed, destroyed, mutilated, or concealed property of the debtor. An Illinois bankruptcy court must find that the debtor acted with actual intent requiring a showing of extrinsic evidence suggesting that fraud exists. In re Smiley, 864 F.2d 562 (7th Cir, 1989). Because direct evidence of a debtor's intent usually is unavailable, intent may be inferred from the circumstances surrounding the debtor's conduct. In re Smiley, supra at 566. The question of intent generally will depend upon assessment of the credibility of witnesses and the court's assessment of that credibility. In re Bonnett, 895 F.2d 1155 (7th Cir. 1989). The burden of proof is placed upon the party filing the complaint in an adversary proceeding to establish all elements of 11 U.S.C. 727 by a preponderance of the evidence. Grogan v. Garner, 111 S.Ct. 654 (1991).