Can A Creditor Claim Fraud On A False Credit Application Which Blocks Discharge?
In the event of a credit card applicant mistating (lying about) income or assets (home ownership when there was none), can a creditor claim fraud to the bankruptcy court that blocks discharge in a Chapter 7 case? Thanks for making this such an informative forum.
Answer:
This is a good question. I would also like to know about the "annual household income" question on those applications. If you were living with your parents at the time of the application and it asks for the "total annual household income," is it fraud if you tell them $150,000, which is true, but as the individual you only make $25,000? If they can show that the decision to extend credit was based on this false statement, then they can ask to have *their debt* (not the entire bankruptcy) declared non-dischargeable.
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