California federal court provides guidance on how to draft a stipulated judgment that is non-dischargeable in bankruptcy.
- August 2, 2019
- Posted by: SMDigital Partners
- Category: News, Recent Developments
The U.S. District Court for the Southern District of California held in In re Wlodarczyk (Cheikes v. Wlodarczyk) that a debtor’s failure to disclose his financial inability to pay a guarantee did not rise to the level of a fraudulent omission leading to non-dischargeability of the debt under Section 523(a)(2)(A) of the Bankruptcy Code, where the creditor failed to ask him to make representations regarding his financial condition and therefore the debtor had no affirmative duty to disclose that poor condition. Thus, although the parties had stipulated to the judgment and stipulated further that the judgment was non-dischargeable, the court held that the judgment in that case nevertheless could be subject to discharge.