For this type of debt to be non-dischargeable, your deceit and lies must be intentional, and the creditor must have relied on your deceit and lies in extending credit. It is important to emphasize that these are facts that the creditor has to prove before the debt will be ruled non-dischargeable by the court.
c. Debts from a false written statement about your financial condition. If a creditor proves that you incurred a debt by making a false written statement, then the debt isn’t dischargeable.
Here are the rules:
- The false statement must be written-for instance, made in a credit application, rental application, or resume.
- The false statement must have been “material†that is, it was a potentially significant factor in the creditor’s decision to extend you credit. The two most common materially false statements are omitting debts and overstating income.
- The false statement must relate to your financial condition or the financial condition of an “insiderâ€- a person close to you or a business entity with which you’re associated.
- The creditor must have relied on the false statement, and the reliance must have been reasonable.
- You must have intended to deceive the creditor. This is extremely hard for the creditor to prove based simply on your behavior. The creditor would have to show outrageous behavior on your part.
d. Recent debts for luxuries. If you run up more that $550 in debt to anyone creditor for luxury goods or services within the 90 days before you file for bankruptcy, the law presumes that your intent was fraudulent regarding those charges; all the charges will survive your bankruptcy unless you prove that your intent wasn’t fraudulent. The term “luxury goods and services†does not include things that are reasonably necessary for the support and maintenance of you and your dependents .
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