The Oklahoma Bar Journal December 2023

(B) use of a statement in writing–

One type is individual claim/ creditor specific, 13 and the other results in a denial of discharge in its entirety ( i.e. , no claims are discharged). 14 11 U.S.C. §523 Section 523 of the Bankruptcy Code sets forth the categories of bad behavior that could result in a claim arising out of such behavior being excepted from the discharge. In relevant part to this article, Section 523 provides that a debtor is not entitled to discharge the following types of debt: (a)(2) for money, property, ser vices or an extension, renewal or refinancing of credit, to the extent obtained by–

debtor’s property to become non-avoidable and allow the debtor to have the cash necessary to stay in operations for the 90-day period. In the event the debtor later (post 90-day risk period) defaults on pay ment and ends up in bankruptcy, the creditor would have the lien on the non-avoidable collateral available to satisfy the settlement obligation. 10 NONDISCHARGEABILITY Certain types of legal claims are not subject to the discharge. The U.S. Supreme Court has found that “Congress intended the fullest possible inquiry to ensure that all debts arising out of fraud are excepted from discharge, no matter their form.” 11 Accordingly, the bankruptcy court is not pro hibited from looking beyond the settlement documents to decide whether the underlying debt was nondischargeable. 12 There are two bankruptcy code sections that govern whether a debtor may receive a discharge.

(i) that is materially false;

(ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor to whom the debtor is lia ble for such money, prop erty, services or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive; or

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(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny;

(A) false pretenses, a false representation or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;

(5) for a domestic support obligation;

(6) for willful and malicious injury by the debtor to another entity or to the property of another entity;

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(9) for death or personal injury caused by the debtor’s opera tion of a motor vehicle, vessel or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug or another substance;

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Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

DECEMBER 2023 | 13

THE OKLAHOMA BAR JOURNAL