Opinion
No. 77-00874
April 9, 1979
Discharge of Debts — False Representations — Credit Cards — Debts of Spouse
Charges made on credit cards by a bankrupt and his estranged wife after the bankrupt was notified that he had exceeded the credit limitations of his account and was directed to return the credit cards constituted liabilities for obtaining property by false representations which were nondischargeable under Section 17a(2) of the Bankruptcy Act.
For one month after the time the creditor notified the bankrupt that he had exceeded his credit limit on certain credit cards, and that he should cease making charges and return the credit cards, the bankrupt and his estranged wife made excessive use of the cards without any application of payment to the account.
Any charges made by the bankrupt after being advised, that his charge privileges were revoked were within the Section 17a (2) exclusion to dischargeability. The bankrupt argued that to hold him responsible for use of the card by someone beyond his control — his estranged wife — placed a burden upon him which could not be overcome with the exercise of utmost care. However, the court found that the bankrupt was aware that his wife was using the credit card and that he had made no demand for return of the card until one month after notification. This along with the fact that the bankrupt himself continued to use the card subsequent to notification by the creditor amounted to fraudulent conduct for which the bankrupt was responsible. Therefore, the liabilities incurred from the time the bankrupt was notified to cease using the credit card until the time the card was returned to the creditor are nondischargeable under Section 17a(2) of the Bankruptcy Act. See Sec. 17a(2) [§ 523(a)(2)] at ¶ 9228.