Take-away — fraudulently obtained debt cannot be discharged with bankruptcy.

Kate and David bought a house in San Francisco intending to remodel it.  The house was later sold for $2m to a developer, Barkley.  Barkley sued for misrepresentation of the house’s condition and was awarded $200,000.  Kate and David tried to avoid payment through bankruptcy.  Barkley sued again.

This all passed in 2008.  Today the debt is closer to $2M and Kate claims that she shouldn’t be held responsible and that her ex-boyfriend was solely responsible for the incomplete repairs.  Kate also argued that the precedent 1885 case had a grammatical error that corrected, would give her a win.

Apparently, the December 20-minute audio of oral arguments is worth hearing.  Kate lost 0-9. Go to audio>>>

SCOTUS Decision on Bartenwerfer v. Buckley, discharge of debt

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