66 East Main Street, 3rd Floor Little Falls, NJ 07424

Wife’s Spending Spree Non-Dischargeable

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  • 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.