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Virginia Attorneys > Blog > General > Fraud Exception in Bankruptcy

Fraud Exception in Bankruptcy

Has someone materially misrepresented their product to you, inducing you to purchase it at significant expense, and the product is not usable for the purpose for which they sold it to you? You notify them about the problem. They say they will correct the problem but then file for bankruptcy, leaving you with product you can’t use and your money depleted.

If you have ever been the victim of fraudulent activity only to have the perpetrator of the fraud file for bankruptcy to escape liability for its actions, it is important to know that there is a fraud exception in bankruptcy through which you may be able to block the perpetrator from discharging its debt to you.

11 U.S. Code § 523 indicates that no debt may be discharged “for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by…false pretenses, a false representation, or actual fraud…”

The attorneys at MichieHamlett have successfully collected damages caused by such fraudulent activity. If you believe you are in this situation, please call us today for a consultation to see if we can help you.

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