楊清泉律師 - TAKING ADVANTAGE OF FRIEND MAY AFFECT DISCHARGEABILITY OF DEBT PART 2

When the Debtor filed for Chapter 7 relief in June 2010, he said he owed the Plaintiff $325,000. When asked how he was going to repay Plaintiff, he said that he intended to repay the loan from the equity in the house. But the problem was that he house had no equity. Oops, a minor miscalculation which debtor blamed on his 6th grade teacher for not teaching him how to add and subtract correctly! He said the house was worth $600,000 with total mortgages of $746,637.

The bankruptcy court agreed with the Plaintiff that his claim of $325,000 against Debtor was not dischargeable pursuant to Sections 523(a)(2) and (4). “The totality of the circumstances-specifically, Debtor’s pattern of borrowing, on an unsecured basis, substantial funds from elderly members of his family and social circle, all while having no real prospect of repayment - lead this court to find that Debtor did not intend to repay Plaintiff; that is, his promise to repay was false and he knew it was false,” the court said. The court also found that the Power of Attorney created a fiduciary relationship because the Plaintiff had to go through Debtor to gain access to his own money. The court found that the Debtor committed a defalcation by violating his fiduciary duties of care and loyalty.  “Though Plaintiff signed the checks himself, he was clearly of reduced mental acuity and also very dependent on Debtor…” This scoundrel should be quartered then hanged!

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years.  He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California.  He speaks Mandarin and Fujien and looks forward to discussing your case with you personally.  Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.