Muir v. McWilliams

(S.D. Ind. June 30, 2014)

The district court reverses the bankruptcy court, holding that Section 523(a)(3)(B) does not apply to the creditors’ claim that the debtors failed to make required disclosures following the prepetition sale of their home. While the debtors failed to list the claim in their schedules, they did not have knowledge of the claim at the time of the bankruptcy filing (the creditors brought the claim in state court after the discharge order) and thus Section 523(a)(3)(B) did not apply. Because that section does not apply, the bankruptcy court had exclusive jurisdiction to determine the dischargeability of the debt, rather than concurrent jurisdiction with the state court in which the creditors brought their claim, and thus should have decided the dischargeability issue. The district court remands to the bankruptcy court to decide the issue. Opinion below.

2014-06-30 – muir v mcwilliams

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