After December 1, 2010, Federal Rule of Civil Procedure 8 (c) no longer required that "discharge in bankruptcy" be plead as an affirmative defense because the Rules Committee felt that the language of 11 U.S.C. § 524, which voids all judgments against a discharged debt, was contradictory to Rule 8(c)’s requirement of pleading the affirmative defense of “discharge in bankruptcy” or waiving the ability to plead “discharge in bankruptcy” after a default judgment.
The author of this article begins with an example of a Debtor who purchases a $100,000 luxury car immediately before bankruptcy, gets his Chapter 7 discharge and then ignores a later lawsuit by the sorely aggreived creditor (which, in the example, never failed to receive a payment). This example is unfortunately flawed on several counts- ignoring the fact that few people, let alone Debtors have $100,000 car loans; that lenders for such purchases are not making typical consumer loans and are, or at least should be, more circumspect in lending; that there is not one bankruptcy court in the country that would not, absent some extremely unique circumstances, dismiss this case under 707(b); that even if this case some how slipped through the 707(b) gauntlet, the Debtor would have to reaffirm this car loan.
The author sees a an onerous burden for the creditor in checking "throughout the country" to see if the Debtor did, in fact, get a discharge, when the US Case Party Index (https://pacer.login.uscourts.gov/cgi-bin/login.pl?court_id=00pcl) allows such a nationwide search in about 15 seconds at the cost of $0.08, leaving aside that it had full opportunity to litigate discharge in the bankruptcy case itself.
These flaws are unfortunate because they betray a clear bias against Debtors (ubiquitous at the author's law school of George Mason, likely due to the tutelage of Prof Todd "BAPCPA's Perfect" Zywicki) that prevents a balanced evaluation of the changes in Rule 8(c). Where the hypothetical Debtor's is blamed for failure to be "responsible for responding to valid lawsuits" p. 25, the creditor is not held to the same account for its failure to respond to a valid bankruptcy filiing.
The change to Rule 8(c) was meant to provide protection for the Debtor, who usually, unlike the skewed example, has rather limited resources, from having to face multiple lawsuits, consolidating much of the discharge litigation in the most appropriate forum, viz. the bankruptcy court.
Brendan Mullarkey CREDITORS BEWARE!.PDF
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