(Bankr. S.D. Ind. Dec. 16, 2015)
The bankruptcy court finds that the Indiana Department of Workforce Development’s claim for overpayment of benefits to the debtor while he was actually employed is dischargeable, but the statutory penalties for the overpayment are not dischargeable. The debtor’s agent defrauded the department without the debtor’s knowledge. Because the debtor was unaware of the fraud, the debt was not excepted from discharge under 11 U.S.C. § 523(a)(2)(A). However, the statutory penalties imposed against the debtor for the fraud were nondischargeable under § 523(a)(7). Opinion below.
Author: Matt Lindblom