Legal Question in Bankruptcy in California

Would ''Conversion'' be considered fraud in a bankruptcy hearing?

In the case of a civil judgement with conversion as the plaintiffs grounds for a settlement...would this type of judgement be considered a case of fraud in a bankruptcy hearing? Funds were placed into the account of the defendant, who in turn utilized those funds for personal use. The funds in question were placed in error, so the plaintiff sought restitution and was awarded a judgement. Now the defendant of the original hearing wishes to file for Chapter 7 bankruptcy...would this judgement be included in the proceedings or would it be considered willful misconduct or fraud on the defendants part? The original funds were credited to a bank account from a grocery store. The amount of the transaction exceeded $7,000.00 and was then utilized by the account holder. A store employee had fouled the transaction and the grocery chain later had a lawyer file the suit in a civil court. Including fees, interest, etc...the amount is steadily climbing and is above $15,000 presently. The defendant of the initial hearing has been brought in to the courts several times to discern the ability to pay (questioning from plaintiffs attorney). If unable to pay the restitution...will Chapter 7 be of any use to this person?


Asked on 1/11/05, 12:49 pm

1 Answer from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: Would ''Conversion'' be considered fraud in a bankruptcy hearing?

Well, the creditor would of course have to timely file a complaint and litigate a nondischargeability action in the Ch. 7 case, but if he/she/it already has a state court judgment finding conversion, it would not be difficult to prove the nondischargeability in the Ch. 7. The debtor in question would be much better served by filing a Ch. 13 case.

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Answered on 1/11/05, 12:59 pm


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