Kirtland Federal Credit Union v. Mesibov

UNTIED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
MARIA ELENA MESIBOV, 	No. 13-10864-j7
Debtor.
KIRTLAND FEDERAL CREDIT UNION,
Plaintiff,
v. 	Adv. No. 13-1069 T
MARIA ELENA MESIBOV,
Defendant.
MEMORANDUM OPINION
This matter is before the Court after trial on the merits on Kirtland Federal Credit
Union’s (“Kirtland’s”) complaint to deny the Debtor’s discharge under § 727(a)(4)(A).1 At issue
are the Debtor’s disclosures about alimony, child support, and wage income in her bankruptcy
schedules, Statement of Financial Affairs, and Means Test. 	The evidence before the Court
consists of the Debtor’s deposition and trial testimony, Plaintiff’s trial exhibits, and the judicially
noticed dockets in this adversary proceeding and the main bankruptcy case.
I. 	FINDINGS
Debtor is divorced, with two children who were 12 and 16 on the petition date. 	The
divorce case2 started in 2008, was protracted and difficult, and took an emotional toll on Debtor.
Debtor’s ex-husband, a doctor practicing in Los Alamos, New Mexico, pays monthly alimony
1 Unless otherwise noted all statutory references are to 11 U.S.C.
2 Maria Mesibov v. David Mesibov, no. D-0132-DM-200800026, New Mexico First Judicial
District Court (the “Divorce Case”).
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and child support to her. The child support amount varies depending on Debtor’s income and the
custody arrangements. Initially, the ex-husband paid Debtor $1,300 per month in child support.
On the Petition Date the amount was $334 per month. 	The alimony payments have remained
steady at $4,700 per month. 	From the monthly alimony payment Debtor’s ex-husband made a
direct payment, per court order, of $1,000 to Debtor’s former divorce lawyer, Richard Lees,
resulting in a net monthly payment to Debtor of $3,700.3
In late 2012 and early 2013 Debtor had a number of part-time jobs,4 including work for
the Los Alamos Public Schools ($9.56 per hour); Jemez Physical Therapy ($10 per hour); Uli’s
Fashions ($10 per hour); and Pajarito Bar and Grill ($7.50 per hour). The number of hours she
worked each month fluctuated.
The nature of Debtor’s work made it difficult to obtain accurate information about her
monthly wage income, which varied widely. 	Further, Debtor does not appear to have much
facility for numbers or financial record-keeping. 	There is no evidence in the record about the
level of Debtor’s education, but the nature of the jobs she had and her trial testimony lead the
Court to conclude that her skills and interests do not lend themselves to factual detail, financial
accounting, or money management.
The Debtor filed this Chapter 7 bankruptcy case on March 15, 2013 (the “Petition Date”).
Debtor’s Schedule B does not have an alimony disclosure on line 17.5 However, her receipt of
3 Debtor testified that several months after she filed for bankruptcy relief, Mr. Lees stopped
receiving the $1,000 monthly payment. No explanation was given for this change.
4 Currently Debtor is unemployed.
5 “Alimony, maintenance, support, and property settlements to which the debtor is or may be
entitled. Give particulars.”
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monthly alimony payments clearly is disclosed in Schedule I, in her Statement of Financial
Affairs, and in Form 22A (the “Means Test”).6
Debtor’s 	original 	Schedule 	I 	disclosed 	monthly receipts 	of 	$3,700 	for 	“alimony,
maintenance, or support.” 	In her Means Test, Debtor broke this figure down into $3,366 per
month of alimony and $334 per month of child support.
Kirtland took Debtor’s deposition on July 23, 2013. At the deposition, Debtor disclosed
the monthly payment of $1,000 to Mr. Lees, discussed above. It appears Debtor also figured out
during her deposition that she receives $3,700 in alimony in addition to the $1,000 payment, and
also receives an additional $334 per month in child support.
Kirtland commenced this adversary proceeding August 2, 2013. 	Debtor filed amended
Schedules I and J on August 13, 2013. In Amended Schedule I Debtor added monthly income of
$334.00 per month for child support. Further, in response to line 177 of her amended Schedule I
Debtor stated:
Debtor’s divorce attorney had a court ordered lien on her alimony at the time of
filing. 	Debtor’s ex-husband paid $1,000 a month from her monthly alimony
settlement directly to the divorce attorney. 	Debtor then only received the
remaining balance of the monthly alimony payment of $3,700.
Debtor’s amended Schedule J also reflects increased monthly expenses of $795, due to
the addition of expenses for income taxes ($520) and telecommunications ($275). 	There is no
evidence in the record that either additional expense is improper or excessive.
6 The official title of the form is “Chapter 7 Statement of Current Monthly Income and Means-
Test Calculation.”
7 “Describe any increase or decrease in income reasonably anticipated to occur within the year
following the filing of this document.”
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Debtor made similar changes to her amended Means Test, filed August 13, 2013 (the
“Amended Means Test”). 	The $1,000 per month payment to Mr. Lees was not included or
mentioned in the Amended Means Test.
Although the evidence on this point is thin, the $1,000 monthly payment to Mr. Lees
appears to be pursuant to a valid, properly-perfected attorney charging lien. 	In her deposition
Debtor described her ex-lawyer’s interest as a “lien,” and the amended schedule I describes the
interest as a “court ordered lien.” The Court is not aware of any court-ordered lien an attorney
can obtain on a fund owed to a former client except for a charging lien.
In her Means Test and Amended Means Test Debtor stated she averaged $1,005 per
month in wage income in the six months before the Petition Date. This included $933 per month
for September-November, 2012. 	However, on January 18, 2013, the state court presiding over
the Divorce Case adopted the Report and Decision of Hearing Officer Modifying Child Support
(collectively the “State Court Order”). The State Court Order determined that the Debtor earned
wages of $1,182.83 in September 2012; $2,049.49 in October 2012; and $1,659.67 in November
2012. 	Had these figures been used in her Means Test, Debtor would have showed average
monthly wage income of $1,354 rather than $1,005.
II. 	§ 727(A)(4) DENIAL OF DISCHARGE8
Upon a timely objection filed by a creditor, the Court may decline to grant a discharge to
a Chapter 7 debtor who “knowingly and fraudulently, in or in connection with the case, made a
false oath or account.” §§ 727(a)(4)(A) and (c)(1). “The purpose behind [§ 727(a)(4)(A)] is to
enforce a debtor’s duty of disclosure and ensure that the debtor provides reliable information to
8 Although 	the 	standard 	under 	§ 	727(a)(4)(A) 	was 	addressed 	in 	detail 	in 	the 	Court’s
Memorandum Opinion, doc. 12, addressing Plaintiff’s Motion for Summary Judgment, some
points bear repeating here.
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those who have an interest in the administration of the estate.” Sierra Chemicals, LLC, v. Mosley
(In re Mosley), 501 B.R. 736, 742 (Bankr. D.N.M. 2013), citing Manning v. Watkins (In re
Watkins), 474 B.R. 625, 635 (Bankr. N.D. Ind. 2012), aff’d, 2013 WL 3989412 (N.D. Ind. 2013).
A. 	Elements. 	Section 727(a)(4)(A) has been distilled into four elements: 	(1) the
debtor must make a false statement under oath; (2) the debtor must know that the statement was
false; (3) the debtor must make the statement with fraudulent intent; and (4) the statement must
relate materially to the bankruptcy case. Mosley, 501 B.R. at 742, citing Rajala v. Majors (In re
Majors), 330 B.R. 880, at *3 (10th Cir. BAP 2005). See also In re Beaubouef, 966 F.2d 174, 178
(5th Cir. 1992) (using five factors that result in an identical test); Bishop v. Mulholland (In re
Mulholland), 2011 WL 4352293, at *4 (Bankr. D.N.M. 2011) (discussing elements).
B. 	Burden of Proof. In a denial of discharge action the party objecting to discharge
must prove by a preponderance of evidence that the discharge should be denied. Relying on the
Supreme Court’s opinion in Grogan v. Garner, 498 U.S. 279 (1991), the Tenth Circuit has held
that a preponderance of the evidence standard is appropriate in a § 727(a)(2) action. First Nat’l
Bank of Gordon v. Serafini (In re Serafini), 938 F.2d 1156 (10th Cir. 1991). The same standard
applies in the present, § 727(a)(4), action. See Grogan, 498 U.S. at 289 (citing legislative history
indicating Congressional intent to use a preponderance of evidence standard for § 727(a)(4)
proceedings).
The burden of proof rests with the plaintiff. 	“[A] person objecting to discharge of the
debtor must show to the satisfaction of the court that there are reasonable grounds for believing
that the bankrupt has committed an act which bars discharge.” Farmers Co-op. Ass'n of Talmage,
Kan. v. Strunk, 671 F.2d 391, 394-95 (10th Cir. 1982) (decided under the Bankruptcy Act).
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However, if the plaintiff shows the existence of a false statement, the burden shifts to the
debtor to demonstrate honesty. “While the creditor bears the ultimate burden of proof under 11
U.S.C.S. § 727(a)(4), once the creditor has demonstrated an omission or false statement, the
burden shifts to the debtor to show that the omission was the result of an honest mistake or to
otherwise provide a credible explanation for the false statement.” U.S. Trustee v. Richesin (In re
Richesin), 2008 WL 413284, at *8 (Bankr. D.N.M. 2008), citing In re Caldwell, 101 B.R. 728
(Bankr. 	D. 	Utah 	1989). 	This 	burden 	shifting 	promotes 	the 	fundamental 	purpose 	of
§ 727(a)(4)(A) of imposing a duty on the debtor to make full disclosure. If a debtor violates that
duty it is appropriate for her to show why the false statement was a mistake rather than an act of
dishonesty.
C. 	Intent. 	“A debtor will not be denied [a] discharge if a false statement is due to
mere mistake or inadvertence. 	Moreover, an honest error or mere inaccuracy is not a proper
basis for denial of discharge.” Gullickson v. Brown (In re Brown), 108 F.3d 1290, 1294-95 (10th
Cir. 1997). 	Reckless indifference to the truth is sufficient to deny the discharge, however. 	See
Boroff v. Tully (In re Tully), 818 F.2d 106, 112 (1 st Cit. 1987) (discharge denied because debtor
“exhibited the reckless indifference to the truth which has consistently been treated as the
functional equivalent of fraud for purposes of § 727(a)(4)(A)”) (citations omitted); Diorio v.
Kreisler-Borg 	Const. 	Co., 	407 	F.2d 	1330, 	1333 	(2nd Cir. 	1969) 	(per 	curium) 	(reckless
indifference to the truth is the equivalent of fraud); In re Moreo, 437 B.R. 40, 62 (E.D.N.Y.
2010) (discharge shall be denied if the debtor exhibited a reckless indifferent to the truth).
One court has held that a debtor who had fraudulently misreported his income but had no
reason to do so was entitled to a discharge. “I am not impressed by the debtor’s explanation, but
there is no reason for him to have lied. 	A completely accurate response to the question would
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not have affected this bankruptcy proceeding in any way, nor would it have forfeited or
jeopardized his Social Security benefits. I conclude that the debtor’s false answer was the result
of carelessness or ignorance and was not a fraudulent act.” Coccia v. Fischer (In re Fischer), 4
B.R. 517, 518 (Bankr. S.D. Fla. 1980). 	This forgiving view has been rejected by at least one
court. 	Virovlyanskaya v. Virovlyanskiy (In re Virovlyanskiy), 2014 WL 1800411 (E.D.N.Y.
2014) (affirming bankruptcy court’s decision not to apply standard used in Fischer).
D. 	Materiality. 	A debtor’s fraudulent statement is not grounds for denial of the
discharge unless the statement is material. 	Richesin, 2008 WL 413284, at *8. 	A false oath is
material if it bears a relationship to the debtor’s business transactions or estate, or concerns the
discovery of assets, business dealings, or property. 	Id. 	Most cases discussing materiality
concern the failure to disclose estate property. In those cases, the value of an omitted asset is not
necessarily determinative of materiality. 	See, e.g., In re Garland, 417 B.R. 805, 815-16 (10th
Cir. BAP 2009) (“[M]ateriality is not defeated by the fact that the undisclosed property interests
are determined to be without value . . . [D]ebtors have an uncompromising duty to disclose
whatever ownership interest they hold in property ….”).
Kirtland does not argue that Debtor hid assets, but rather that she understated her net
income on her schedules and Means Tests. 	The materiality standard in such cases is less clear.
While misrepresentations on a means test can form the basis for a § 727(a)(4) denial of
discharge, see In re Radloff, 418 B.R. 316, 325 (Bankr. D. Minn. 2009), and In re Crumley, 428
B.R. 349, 365 (Bankr. N.D. Tex. 2010), determination of a debtor’s “current monthly income,”
“total deductions from income,” and “monthly disposable income” can be difficult and unclear.
At a minimum, the Court holds that if underreported income or excessive expenses show
that no presumption of abuse arises when accurate disclosures would have shown the opposite,
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the misrepresentation would be material. 	In other cases, where the result of the Means Test
would not change even after disclosure adjustments are made, the Court will review the issue on
a case-by-case basis.
E. 	Grant of Discharge Preferred. 	The grant of a discharge is the strong policy
preference. “Denial of discharge is a harsh remedy to be reserved for a truly pernicious debtor.
The provisions denying the discharge are construed liberally in favor of the debtor and strictly
against the creditor.” Mosley, 501 B.R. at 742 citing Soft Sheen Products, Inc. v. Johnson (In re
Johnson), 98 B.R. 359 (Bankr. N.D. Ill. 1988), and In re Shebel, 54 B.R. 199, 204 (Bankr. D. Vt.
1985). 	See also Rosen v. Bezner, 996 F.2d 1527, 1531 (3d Cir. 1993) (denying debtor’s
discharge is an extreme step and should not be taken lightly); Commerce Bank & Trust Co. v.
Burgess (In re Burgess), 955 F.2d 134 (1st Cir. 1992) abrogated on other grounds; Field v. Mans,
516 U.S. 59 (1995) (reasons for denial of a discharge must be real and substantial rather than
technical and conjectural); FFI Group, LLC v. Olson (In re Olson), 2014 WL 380388, at *2
(Bankr. W. D. Pa. 2014) (citing Rosen’s “extreme step” language); McVay v. DiGesualdo (In re
DiGesualdo), 463 B.R. 503 (Bankr. D. Colo. 2011) (denial of discharge should occur only in
extreme circumstances); Melarango v. Ciotti (In re Ciotti), 448 B.R. 694, 702 (Bankr. W.D. Pa.
2011) (same).
III. 	DEBTOR’S ALLEGED UNDERREPORTED INCOME.
A. 	The $1,000 Monthly Payment from Ex-Husband to Mr. Lees.
1. 	Should the Payment have Been Included in CMI? 	The trial evidence
makes clear that the ex-husband’s total monthly alimony obligation to Debtor is $4,700. 	It is
equally clear that, pursuant to a state court order, the ex-husband sent $1,000 of each monthly
payment directly to Mr. Lees, to be applied to the attorney fees Debtor owed Mr. Lees for his
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work in the divorce. Kirtland argues that the payment to Mr. Lees should have been included in
Debtor’s Means Test.
The means test is a key component of the BAPCPA amendments to the Bankruptcy
Code. 	“The test seeks to ensure that debtors who can afford to repay at least a portion of what
they owe their creditors do not abuse the bankruptcy process by filing under chapter 7.” Silvers
v. Alanys (In re Alanya), 2010 WL 5348728 (Bankr. E.D. Va. 2010). The “means test is a blind
legislative formula serving to determine, under an objective standard, whether the Court must
presume that a filing is abusive.” 	In re Smith, 2007 WL 1836874, at *8 (Bankr. N.D. Ohio
2007).
“Congressional policy is implemented not only by application of the means test under §
707(b)(2)(A) but also by application of the § 707(b)(2)(B) provisions relating to rebuttal of any
presumption and § 707(b)(3), under which the court may consider the totality of a debtor's actual
financial circumstances . . . .” Id.
The means test is based on “current monthly income” (“CMI”) as defined in § 101(10A),
less the amounts set forth in § 707(b)(2)(A)(ii), (iii), and (iv). 	The formula is contained in
Official Form 22A.
While alimony may not be property of the estate,9 it must be disclosed to determine a
debtor’s CMI under § 101(10A). 	See, e.g., In re Lewis, 401 B.R. 431, 440 (Bankr. C.D. Cal.
2009) (CMI includes alimony), citing In re Featherston, 2007 WL 2898705, at *11 (Bankr. D.
Mont. 2007), affirmed, 2007 WL 2898705 (Bankr. D. Mont. 2007) (same); Eugene R. Wedoff,
9 See Peters v. Wise (In re Wise), 346 F.3d 1239 (10th Cir. 2003); Burnside v. Burnside, 514 P.2d
36, 39 (N.M. 1973) (“The right to alimony is a continuation of the right to support. 	It is a
personal and not a property right.”); Brister v. Brister, 594 P.2d 1167, 1171 (N.M. 1979)
(“Alimony is a personal right as opposed to a property right”); Lovato v. Lovato, 644 P.2d 525,
527 (N.M. 1982) (“Alimony is not intended as a penalty against a husband but is a personal right
intended for the purpose of one spouse’s supporting another.”).
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Means Testing in the New 707(b), 79 Am. Bankr. L. J. 231, 244-45 (2005) (CMI includes
alimony); In re Hersh, 2012 WL 5387627 (Bankr. N.D. Ill. 2012) (the court included alimony in
its calculation of CMI). Thus, it is clear that the $1,000 monthly payment from the ex-husband
to Mr. Lees should have been included in Debtor’s CMI.
2. 	Is the $1,000 Payment a Deductible Expense? The crucial question is not
whether the $1,000 monthly alimony payment is properly part of CMI (it is), but whether the
monthly payment to Mr. Lees could be deducted as a court-ordered expense.10 Some court-
ordered pre-petition payments are not deductible because they can be stopped by the bankruptcy
filing. See, e.g., In re Strickland, 504 B.R. 542, 546 (Bankr. D. Minn. 2014) (garnishments may
not be deducted on Part V, line 28 because the payment would be discontinued after the petition
date); In re Cleaver, 426 B.R. 390, 395 (Bankr. D.N.M. 2010) (same). On the other hand, Court-
ordered payments that “ride through” bankruptcy, such as alimony or child support payments,
are properly deductible in the Means Test. 	See In re Egebjerg, 574 F.3d 1045 (9 th Cir. 2009)
(alimony and child support are deductible); In re Clary, 2012 WL 868717, *16 (Bankr. M.D. Fla.
2012) (child support is deductible); In re Maiorino, 435 B.R. 806 (Bankr. D. Mass. 2010)
(domestic support obligation is deductible).
From the sketchy record before the Court it appears Mr. Lees has a valid attorney
charging lien on Debtor’s right to receive alimony, which by court order is payable at $1,000 per
month.11 In general, such charging liens are unaffected by the bankruptcy filing of former client.
See, e.g., In re Electronic Metal Products, Inc., 916 F.2d 1502, 1505 (10 th Cir. 1990) (attorney
charging lien under Colorado law would have survived debtor’s bankruptcy filing if the attorney
10 Part V (Calculation of Deductions From Income), Line 28 (Other Necessary Expenses: court-
ordered payments).
11 Debtor’s schedules indicate that on the Petition Date she owed Mr. Lees $18,703.
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had given the required notice); In re Benbow, 496 B.R. 605, 612 (Bankr. D. Colo. 2013)
(upholding attorney charging lien on the proceeds of the sale of the marital residence, ordered to
be sold in a divorce proceeding); In re Bingham, 344 B.R. 648 (Bankr. W.D. Okla. 2006) (debtor
may not avoid a properly perfected attorney charging lien under § 522(f)).
From the information in the record it appears Mr. Lees’ charging lien can “ride through”
the bankruptcy case unaffected. Thus, the payments would be deductible on the Means Test and
the net effect of the $1,000 payment would be $0. 	If Mr. Lees’ charging lien was avoidable, it
was incumbent upon Kirtland to provide evidence of that fact because the burden of proof rests
with Kirtland. No such evidence is before the Court.
B. 	Child Support.
Another problem with Debtor’s original income disclosure and Means Test calculation is
that, even apart from the $1,000 issue, Debtor’s combined alimony and child support income is
$4,034 per month, not $3,700 per month. The smaller figure was disclosed in Debtor’s original
Schedule I and Means Test. 	The error was pointed out in Kirtland’s deposition of the Debtor,
and corrected when Debtor amended her Schedule I and Means Test August 13, 2013.
C. 	Wage Income.
Another main focus of the trial was the wage component of Debtor’s CMI. 	Debtor
calculated her average wage income for the six months before the Petition Date by using $933 in
wage income for September-November, 2012.12 At trial, the Court admitted into evidence
without objection the State Court Order, which contains, inter alia, findings about Debtor’s wage
12 The state court made projections about Debtor’s likely income after November 2013. 	Based
on, inter alia, the fact that Debtor’s varied widely, the Court will not consider the projections.
There is no evidence that the figures Debtor used for December, 2012-February, 2013 are
inaccurate.
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income for September-November 2012. 	Had those figures had been used rather than Debtor’s
figures, CMI would have increased by about $350:
Month 	Debtor’s Wage Figures 	Wages Using State Court
Order
September 2012 	$933 	$1,182
October 2012 	$933 	$2,049
November 2012 	$933 	$1,660
December 2012 	$933 	$933
January 2013 	$1,149 	$1,149
February 2013 	$1,149 	$1,149
Average: 	$1,005 	$1,354
Although no party argued that the Court is bound to use the State Court Order figures, the
Court finds them credible.
Debtor testified that when she prepared her bankruptcy schedules and Means Test, she
came up with her wage income from amounts deposited into her bank account. She testified that
she believed the information was accurate, and that she did not intend to mislead anybody. She
admitted, however, that the state court judge’s findings probably were accurate. 	She did not
explain why she chose not to use the state court judge’s figures when she and her lawyer
calculated her CMI.
IV. 	AMENDMENTS TO EXPENSES.
In the amendments to her schedules and Means Test Debtor added a $520 monthly
expense for income taxes and a $275 monthly expense for telecommunications services.
Kirtland did not object to these amendments or introduce any evidence that the expenses were
improper or excessive. The Court assumes the expenses are legitimate and reasonable.
V. 	CORRECTED MEANS TEST
The following table shows the result of making the changes to Debtor’s income and
expenses discussed in this opinion:
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Original
Means Test
Amended
Means
Test
Amended
Means Test
with State
Court Wage
Income
Amended
Means Test
with State
Court Wage
Income and
$1,000
alimony
Wage Income 	$1,005 	$1,005 	$1,354 	$1,354
Alimony/Child
Support Income
$3,700 	$4,134 	$4,134 	$5,134
Total Income 	$4,705 	$5,139 	$5,488 	$6,488
Original deductions 	$4,926 	$4,926 	$4,926 	$4,926
Income 	tax
deduction
$0 	$520 	$520 	$520
Telecommunications
expense
$0 	$275 	$275 	$275
Payment to Mr. Lees 	$0 	$0 	$ 	$1,000
Total Deductions 	$4,926 	$5,721 	$5,721 	$6,721
Disposable Income 	[$221.10] 	[$682.10] 	[$233] 	[$233]
If Debtor had used all of the appropriate figures, then based on the current record, her net
monthly income would have been a negative $233, rather than the negative $221 shown on her
original Means Test.
VI. 	KNOWLEDGE; INTENT TO DECEIVE
A. 	Alimony and Child Support.
The Debtor testified that she told her bankruptcy counsel about all alimony payments,
including the $1,000 payments to Mr. Lees, and that she relied on counsel to prepare the
bankruptcy documents appropriately. 	The Court finds this testimony credible. 	The disclosure
issues regarding the $1,000 payment are somewhat unusual; appropriate disclosure would not be
obvious to a lay person. The Court finds that Debtor did not knowingly make a false statement
with regard to the $1,000 payment, nor had any fraudulent intent. 	The strongest circumstantial
evidence supporting this finding is the disclosure of the payment in the Debtor’s amended
Schedule I.
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With respect to the failure to list an additional $334 in alimony/child support payments,
the Court concludes, similarly, that the Debtor did not knowingly make a false statement about
this amount, nor intend to deceive any party.
Clearly, Debtor and her counsel could have done a better job of disclosing alimony on her
bankruptcy schedules. 	The better practice would have been to include alimony on Schedule B,
even though it may not be estate property. 	Debtor should have done more to verify the full
amount of alimony and child support she received monthly. 	Finally, Debtor should have
included the $1,000 per month of alimony paid to Mr. Lees on Schedule I and the Means Test,
and then deducted it as an expense.
B. 	Wages.
Debtor’s wage calculation was sloppy, but her average figure only differed from the
average obtained using the State Court’s figures by about $350 a month. The numbers involved
are not large; using the September-November 2012 income figures found by the state court
yields an annual wage income of less than $20,000. By the time she filed her bankruptcy case,
Debtor’s wage income had steadied to about $1,100 per month, or about $13,000 per year.
Currently it is $0. 	Her “guesstimate” of $933 per month for late 2012 seems reasonable given
the context. The Court finds that Debtor’s statements were not knowingly false, and that Debtor
had no fraudulent intent.
If Debtor and her counsel had disclosed all income and expenses correctly in the first
instance, the Means Test would have shown a greater monthly negative than it did. This strongly
suggests that Debtor did not intend to make false statements. Rather, the evidence points toward
poor preparation of Debtor’s bankruptcy schedules, SOFAs, and Means Test, for which counsel
must be held primarily responsible
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VII. 	CONCLUSION
The Court finds that the Debtor tried to fill out her bankruptcy schedules accurately. She
is not sophisticated in financial or business matters and was adversely affected by the divorce.
With better guidance from her counsel, this adversary proceeding likely could have been
avoided. The Court concludes that Debtor did not knowingly make false statements, nor did she
have fraudulent intent when she signed and filed her original bankruptcy documents. Given the
strong public policy favoring the granting of a discharge, the Court concludes that the discharge
should be granted in this case.
The Court will grant the Debtor a discharge. 	A separate judgment consistent with this
opinion.
____________________________________
Hon. David T. Thuma
United States Bankruptcy Judge
Entered: June 12, 2014.
Copies to:
Kevin D. Hammar
Jason Wexler
1212 Pennsylvania NE
Albuquerque, NM 87110
Matthew Gandert
1128 Pennsylvania St. NE
Suite 210
Albuquerque, NM 87110
Maria Elena Mesibov
8401 Spain Rd. NE Apt 31D
Albuquerque, NM 87111
-15-
Case 13-01069-t Doc 28 Filed 06/12/14 Entered 06/12/14 15:30:18 Page 15 of 15