Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Diane Davis
A debtor can keep $12,678 in Connecticut unemployment benefits despite allegations that she wasn’t qualified to receive them, the U.S. Bankruptcy Court for the District of Connecticut held March 30 ( Conn. Dep’t of Labor v. Davis (In re Davis) , 2017 BL 103710, Bankr. D. Conn., No. 14-31962 (JAM), 3/30/17 ).
Cynthia Davis lied when she represented that she hadn’t earned any wages and was legally eligible to receive unemployment benefits, the Connecticut Department of Labor argued.
Davis had in fact been employed when she received unemployment benefits, and must pay them back, the agency said. That debt should be non-dischargeable in her bankruptcy, the agency argued.
In general, Bankruptcy Code Section 523(a)(2)(A) provides that debts for money, property, services, or an extension, renewal, or refinancing of credit can’t be discharged in bankruptcy if they are obtained by false pretenses, a false representation or actual fraud.
But CDOL failed to prove that Davis knowingly or fraudulently made a false representation with the “intent and purpose of deceiving” the agency, Chief Judge Julie A. Manning wrote.
Without a finding of fraud, the administrative penalties assessed by the agencycan also be discharged, the court said.
As part of the weekly application process to receive unemployment benefits, Davis, over the phone, had to verify her identity and certify that she earned no wages during the prior week. The answers were recorded and kept as an internal record.
The court found Davis’s testimony to be consistent that she never made a false statement regarding her employment and had always stated that she was working reduced hours.
Lawrence G. Widem represented CDOL; Davis represented herself.
To contact the reporter on this story: Diane Davis in Washington at DDavis@bna.com
To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)