Bankruptcy Law, The Law of Debtors and Creditors Problem Set Answers, Warren Westbrook Sixth Edition - Problem Set 12

Problem Set 12, p.257

• Yes, he would have difficulties. §727(a)(3) failed to keep or preserve any recorded info and this failure could not be justified under all of circumstances. §727(a)(3) does not say how long you should keep the records: forever.
• §523(a)(2)(B) and §727(a)(2); If the statement of the debtor is oral, just as “I has a lot of money”, is it covered by §523(a)(2)(B)? Probably no. but it is covered by §727(a)(2), right? I think there is no requirement for writing under §727(a)(2); if the creditor has a choice, §523(a)(2)(B) as a rifle shot is more favorable. If he sues under §727(a)(2) as a globe denial, other creditors will have a free ride.
• $2500, $1000 and $200 are alimony, covered by §523(a)(5) that exempts a domestic support obligation from discharge; for the $10K lump sum, it is more like a settlement, covered by §523(a)(15). But is it influenced by the state law or the debtor or creditor’s economic ability? It does not matter the relative incomes of the parties.
• §523(a)(6) willful or malicious injury; Drunk driver is not discharge under §523(a)(9); tort claimants from the driving under §507(a)(10) has a priority.
• §523(a)(2)(A) and (C); it could be a false pretense under §523(a)(2)(A). Under §523(a)(2)(C), the debt for the luxury goods is presumed to be a false pretense. So (C) shift of the proof burden to the debtor. The key discretionary issue is whether the plane ticket, wallpaper, etc. are the luxury goods, and are they necessary?
• §523(a)(7). Not dischargeable. Does the ticket get the priority? No; it cannot fit into the §507(a)(8).
• Student loans is not dischargeable as a general rule.

• Moral hazard; why not other debtors? What is the policy?
• Students have the high potential income; income-related moral hazard.
• Have not made the efforts to pay.
• Why do we distinguish the education loan and other loan? From the perspective of investment, the creditors cannot take away the education.

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