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November 2019 Archives

Objective Test for a Creditor's Compliance with the Bankruptcy Discharge Injunction

In Taggart v. Lorenzen, 139 S. Ct. 1795, 1802 (2019), the Supreme Court overruled the Ninth Circuit by requiring an objective test for a creditor's compliance with the bankruptcy discharge injunction. The nation's highest court explained that "a party's subjective belief that she was complying with an order ordinarily will not insulate her from civil contempt if that belief was objectively unreasonable." Id. This ruling went against more recent Ninth Circuit case law that a "'good faith belief' that the discharge order 'did not apply'" to a creditor's claims would prevent a court from ordering civil contempt sanctions against such a creditor. Id. at 1801.

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