Wednesday, May 19, 2010

Section 727(a)(4)(B): False Claim

Section 727(a)(4)(B) prohibits the granting of a discharge


to a debtor who knowingly and fraudulently presented or used


a false claim in or in connection with a bankruptcy case.


This provision of the code is utilized infrequently. The


courts that have considered objections to discharge for


presenting a false claim have required the objecting party


to prove that the debtor presented or used an inflated or


fictitious claim. Such cases generally involve the


scheduling of non-existent debts, the scheduling of inflated


debts, or the filing by the debtor of a false proof of


claim.



A §727(a)(4)(B) violation requires both intentionality and


materiality to be actionable. At least one bankruptcy court


has denied a debtor’s discharge where the court found that


the overstatement of a secured claim was a material falsity


because it created a mistaken belief that the liens against


the debtor’s residence exceeded it fair market value.
 
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.

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