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Greater Pittsburgh Police Federal Credit Union v. Hilley
Citation: 124 F. App'x 81Docket: No. 04-2373
Court: Court of Appeals for the Third Circuit; February 2, 2005; Federal Appellate Court
The Greater Pittsburgh Police Federal Credit Union (FCU) appealed a District Court ruling that affirmed a Bankruptcy Court's decision declaring Harry J. Hilley's debt to the FCU dischargeable under Chapter 7 of the Bankruptcy Code. The appeal was based on the FCU's argument that Hilley had misrepresented his ability to repay loans taken in April and July 2002, especially following his wife's job resignation, which led to a loss of income. The FCU contended that this constituted grounds for nondischargeability under 11 U.S.C. § 523(a)(2)(A), which prohibits discharges for debts obtained through false pretenses or fraud, excluding misrepresentations about financial condition. The Bankruptcy Court examined two theories presented by the FCU: Hilley’s implied misrepresentation of his ability to repay and his intent to repay the loans. It found the first theory unviable, noting that any implied misrepresentation about Hilley's financial condition could not support a nondischargeability claim under the statute. Regarding the second theory, the Bankruptcy Court determined that Hilley’s intent to repay was not proven by a preponderance of the evidence. The evidence suggested it was equally likely that Hilley was unaware of his impending bankruptcy when he borrowed the money, as he had made all payments prior to filing and had not consulted a lawyer about bankruptcy until September. The District Court upheld these findings, stating they were not clearly erroneous. The FCU also claimed that Hilley’s obligations were nondischargeable under § 523(a)(2)(B), which requires proof of a misrepresentation in writing. However, the Bankruptcy Court noted the FCU did not challenge any written statements made by Hilley, leading to the conclusion that this claim also failed. The appeal ultimately resulted in the affirmation of the District Court's judgment.