Case Summary:
Complaints on dischargeability. The Debtor sold the Plaintiffs’ collateral without their consent. Plaintiffs separately sought to have debts declared nondischargeable for “willful and malicious injury.” As to Farmers Implement Store, there was no provision barring the sale of its collateral in the security agreement, thus there was no conversion, and its complaint was dismissed. As to Farmers Savings Bank, the Debtor testified that he knew that the sale of the collateral would injure the Bank. A conversion with knowledge that injury would result is “willful and malicious,” so the debt was excepted from discharge § 523(a)(6).
Statute/Rule References:
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
11 U.S.C. § 1325(a)(3)
11 U.S.C. § 1325(a)(7)
Key Terms:
Willful and Malicious - Defined
Non-Dischargeable Debt