Debt Incurred for Misuse of Client’s Retirement and Investment Funds Declared Nondischargeable A debt owed under a judgment entered by the Court

Debt Incurred for Misuse of Client’s Retirement and Investment Funds Declared Nondischargeable A debt owed under a judgment entered by the Court

First Instance of the Commonwealth of Puerto Rico was declared Nondischargeable by the

U.S. Bankruptcy Court for the District of Puerto Rico. The state court found that the debtor induced the plaintiff into providing the debtor with funds to allegedly invest in real estate and a retirement plan. However, the debtor instead withheld the funds and used them to purchase real estate for his personal gain.

In bankruptcy, the debtor—appearing pro se—argued that the state court judgment should not preclude litigation as to nondischargeability. Specifically, the debtor argued that he was not adequately represented in the state court proceedings, as evidenced by the fact that there was no opposition to the motion for summary judgment filed against him.

Judge González disagreed, reasoning that the mere fact that the debtor did not oppose summary judgment did not mean that he did not have a fair opportunity to defend himself. In this context, the bankruptcy court found decisive that the debtor had ample opportunity to file an opposition, but chose not to.