Issues in Chapter 7 agricultural/farm bankruptcies

Posted on July 14, 2009. Filed under: Uncategorized |

In re Buck,(Bkrtcy.E.D.N.C.) Discharge

Debtor-farmer’s conversion of lender’s collateral was in nature of “willful and malicious” injury. A Chapter 7 debtor’s conversion of a lender’s collateral, in allowing his brother to keep a portion of the crop proceeds that should have been remitted to the lender, and in trading in a tractor that secured the lender’s claim for another tractor without notice to the lender, were in the nature of “willful and malicious” injuries, for dischargeability purposes. That the debtor had acted with knowledge of the wrongfulness of his acts could be inferred, for purpose of satisfying “malicious” element of the dischargeability exception, from the fact that the debtor never informed the lender that crop proceeds were being used to cover this alleged debt to the brother, and from the fact that the debtor continued to list the tractor that he had traded-in on documents provided to the lender even after the trade-in.

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