Wednesday, May 19, 2010

Section 727(a)(4)(A): False Oath or Account

Section 727(a)(4)(A) provides that the court shall grant the

debtor a discharge, unless the debtor knowingly and

fraudulently, in or in connection with the case, made a

false oath or account. Examples of these false oaths

relating to the bankruptcy schedules include: understating

income, over stating expenses, intentionally omitting

assets, intentionally omitting debts owed to creditors, or

failing to identity fraudulent conveyances or preferential


A party objecting to a debtor’s discharge must allege and

prove the following: (1) the debtor made a statement under

oath; the statement was false; (3) the debtor knew the

statement was false; (4) the statement was made with

fraudulent intent; and (5) the statement related materially

to the bankruptcy case.

Qualifying statements include statements in documents, such

as the bankruptcy schedules and statement of financial

affairs, filed with the petition and statements by the

debtor during examinations under oath---including the

Section 341 meeting of creditors.

Because a debtor is unlikely to admit having made a

deliberate misstatement, knowledge of falsity or fraudulent

intent may be found where the debtor acted with reckless

disregard for the truth. The requirement of materiality was

judicially created to ensure that debtors are not denied

discharge for inconsequential or technical misstatements. A

test for materiality is whether the false statement relates

to the debtor’s business transactions or estate or whether

it is pertinent to the discovery of assets or the existence

or disposition of property.
Warmest Regards,

Bob Schaller

Your Bankruptcy Advisor Blog

By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm Click for Bankruptcy Lawyer Job Opportunities. You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at Discharging Student Loans to learn about how the bankruptcy laws can help you.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys. For information about Chapter 7 bankruptcy Click Here

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