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If an ex-partner has told a bankruptcy judge that you embezzled money will the court simply buy this accusation at face value?

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July 16, 2015 7:21PM

That type of allegaton might be subject to a criminal investigation. However, the BK court has no jurisdiction over such a matter.

If the partner was allegeding that a debt was owed him due to the embezzlement, the Bankruptcy Court would certainly have jurisdiction to hold the debt is non-dischargeable as arising from fraud. Fraudulently obtained debt is not dischargeable in Bankruptcy.

NO. The Bankruptcy court would not "buy the accusation at face value." He would hear your argument and the ex-partner's and would rule on the side of the person who prevailed by a preponderence of the evidence. The burden to prove fraud would be on the ex-partner. So if it was 50-50, you should win.