Background:
- Husband and Wife had a joint account with a limited credit line.
- Bank made error and increased the allowable credit limit to $100,000.
- Wife took full advantage of the situation and began to go on a spending spree; charging in excess of $80,000.
- Husband had no knowledge of the situation at the time.
- Wife handled all the finances.
- When the bank demanded this money be paid back through a payment plan, wife informed husband of the situation.
- Couple filed for bankruptcy.
- Bank filed an adversary proceeding.
Court Ruling
- Although the bank made an error in the credit limit; bank was not responsible.
- Wife was fully aware of the situation and took advantage; regardless of the fact that the husband was unaware.
- Debtor-wife’s obligation to the bank was non-dischargeable.
- Exploiting a situation and knowingly taking advantage was unacceptable to the Court.
