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Bankruptcy – Dischargeability – Consumer Debt – Credit Card Charges – Actual & Justifiable Reliance – Insufficient Evidence (access required)

Discover Bank v. Warren Even though the clothing items the defendant-debtor bought for her son’s wedding shortly before she declared bankruptcy were luxury goods, the plaintiff-credit card company failed to prove that defendant fraudulently misrepresented her intention to repay the amounts charged. Unbeknownst to the 71-year-old defendant, her estranged husband had lost a large account and was no longer able to provide her the support he had customarily provided; furthermore, after consulting a lawyer about bankruptcy, defendant’s only credit card purchase was to obtain a credit report, and in the months leading up to her bankruptcy petition, defendant’s credit card payments exceeded the minimum amount due, and she returned some items she had purchased for a credit towards her debt. Defendant also asked a friend about lending her the money she needed to avoid filing bankruptcy

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