Let's suppose you're an embezzler.
Well, it stands to reason that you won't be able to scrape off your debts incurred by embezzlement, because consumer bankruptcy under Chapter 7 is designed and intended to provide an honest debtor relief from overwhelming debt.
And so it often goes. As it does in this article about Dawn Solomon, for instance, by Leslie H. Dixon.
Turns out that milking a healthcare system is pretty easy, at least for Dawn; she skedaddled with four million dollars from MaineCare, and was ultimately discovered, and then she was prosecuted, and then she filed bankruptcy.
Her ordinary, garden-variety debts have been discharged; it's a little misleading to suggest that she was "granted" a discharge, because that's a fairly automatic process in the U.S. Bankruptcy System.
And there was unintentional bankruptcy humor in the article, which points out that an Attorney General spokesperson repeatedly declined to answer how the money would be recovered.
Let's think about this for a minute. A currently unemployed health care provider is sitting in a prison cell after filing a bankruptcy. Her real estate holding company is also in Bankruptcy Court.
If you were asked to bid for the restitution judgment against Dawn Soloman, would you pay a lot of dough?
Yeah, me neither.
Unless Dawn Soloman comes out of prison and becomes the world champion Sugar Baby, my guess is that the four million dollars in debt is gone forever.
There are a lot of other debts that will, in most cases, survive the bankruptcy process. They include HOA Fees incurred post-petition, tax debts that aren't quite ripe enough, and student loans unless (in most jurisdictions) you pass the dreaded Brunner Test.
And you really don't want to be so bad off that you pass the Brunner Test.
