While most loans will be discharged in a bankruptcy, there are several exceptions. In the recent case of Hometown Credit, LLC v. Peters (In re Peters), 2016 WL 4991506 (Bankr. S.D. Miss. 9/16/16), the court held that the debtor’s unsecured loan with Hometown was non-dischargeable. In this case the debtor completed a loan application and submitted it to Hometown, which then approved the loan. After she filed bankruptcy, Hometown filed a complaint objecting to the discharge of its debt on the basis that the application the debtor submitted to it did not disclose the pay day loans she still had outstanding. Its representative testified at the trial that had it known about these loans it never would have loaned her any money. The court found the representative’s testimony credible, especially since the debtor got one of the pay day loans just days before she got the loan with Hometown, but failed to disclose the loan. In addition, the court noted that there was no “red flags” in the application to give the lender pause to further investigate the debtor’s finances.
If you are considering filing for bankruptcy and have questions and concerns about whether your loans will be discharged, please contact us. The firm of Laura Margulies & Associates, LLC has successfully handled thousands of cases in Maryland and Washington, D.C., many involving unique or novel issues. Please contact us today for a consultation at (301) 816-1600. Our website address is: www.law-margulies.com.