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In re Madaj
United States Court of Appeals for the Sixth Circuit
149 F.3d 467
Madaj and his wife (plaintiffs) borrowed a large sum of money from Madaj’s parents (defendants), promising to pay it back within a few months. Despite the parents’ repeated appeals for payment, the children did not repay the loan. Unbeknownst to the parents, the children filed for Chapter 7 bankruptcy. Among their listed creditors and scheduled liabilities, the children did not include their obligation to the parents. The children had no assets with which to pay creditors; after going through the Chapter 7 process, their debts were discharged. The parents, still in the dark about the bankruptcy, filed a state action against the children and received a judgment against them. The children then moved the bankruptcy court to reopen their Chapter 7 case so that they could schedule the parental debt and have it discharged. The parents opposed the motion to reopen. The bankruptcy court denied the motion to reopen the case but ruled that the parental debt was discharged nonetheless. The district court affirmed. The parents appealed.
Rule of Law
Holding and Reasoning (Batchelder, J.)
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