Nondischargeable Debts: Some Lies Matter More Than Others

Law360, New York (October 23, 2012, 3:21 PM EDT) -- In Bandi v. Becnel (In re Bandi), 683 F.3d 671 (5th Cir. 2012), the debtors made false statements regarding their ownership of particular real estate. The Fifth Circuit upheld a finding that debts incurred in reliance on those false statements were nondischargeable in bankruptcy. The statements were characterized as false statements, but not as statements “respecting the debtor’s or an insider’s financial condition,” which are only nondischargeable if they meet a more stringent standard.

Although a general goal of bankruptcy is to provide a “fresh start”...
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