IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE:

LARRY E. CHARLES and : Case No. 14-10718-TPA

SHIRLEY M. CHARLES, :

Debtors : Chapter 12

 :

CROSSROADS BANK, : Adv. No. 14-1084-TPA

Plaintiff :

 : Related to Doc. No. 19

v. :

 :

LARRY E. CHARLES and :

SHIRLEY M. CHARLES, :

Defendants :

Appearances: Crystal Thornton-Illar, Esq., for the Plaintiff

Brian C. Thompson, Esq., for the Defendants

MEMORANDUM OPINION

Plaintiff Crossroads Bank (“the Bank”) filed this adversary proceeding against the

Debtors seeking a determination that a debt owed to it by the Debtors is not dischargeable in

bankruptcy based on 11 U.S.C. §523(a)(2)(B) (false statement in writing) and an order in the

Debtor’s prior bankruptcy approving a settlement that provided the debt would be nondischargeable. The Bank has now filed a Motion for Summary Judgment (“Motion”) at Doc. No.

19, to which the Debtors have responded. Both sides have submitted briefs and have agreed to

forego any oral argument. For the reasons set forth below, the Motion will be granted.1

1 The case is a core matter under 28 U.S.C. §157(b)(2)(I) and the Court has jurisdiction

over the matter pursuant to 28 U.S.C. §1334. Neither Party has ever raised an issue regarding

jurisdiction or core status.

1

FILED

CLERK

U.S. BANKRUPTCY 

COURT - WDPA 7/6/15 8:20 am

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 1 of 16
FACTS

The Debtors, Larry and Shirley Charles, are family farmers, as is their son, David

Charles (“David”). In May 2009, David sought financing from the Bank to purchase two grain bins

and related accessories. On May 11, 2009, the Bank and David entered into an Indiana Commercial

Lease Agreement (“Lease”), with the Bank as lessor and David as lessee, pursuant to which David

was to make an initial payment of $5,900, followed by 10 further semi-annual payments of

$6,735.80. Pursuant to a Residual Purchase Agreement executed the same date, at the end of the 51⁄2

year term of the Lease, David was to purchase the grain bins outright from the Bank for 10% of the

original cost to the Bank.

Debtor Larry Charles signed the Lease that same date in a block near the end

marked “Personal Guaranty” which stated that he “unconditionally guaranteed to [Bank] the full

and prompt performance by the Lessee.” Debtor Shirley Charles signed a separate document that

same date entitled Individual Guaranty representing that she was “unconditionally” guaranteeing

to pay the Bank any installments due under the Lease.2 (The two documents are referred to

hereinafter as the “Guaranties”). There is a sharp disagreement among the parties as to how the

Debtors came to sign the Guaranties. 

The Bank claims that David did not have sufficient creditworthiness on his own to

obtain the Lease, and therefore the Debtors submitted a credit application to the Bank and agreed

2 It is not clear from the record why the two Debtors signed separate documents like

this rather than the same one, but that is not relevant for purposes of the Motion.

2

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 2 of 16
to act as guarantors so that David could obtain the financing. The Bank says it relied on the

Debtors’ credit application and would not have agreed to enter the Lease with David without the

Debtors acting as guarantors. The Debtors argue that they did not know David was unable to secure

the financing on his own and were misled by the Bank into simply believing that they were involved

in the transaction only because the grain bins that were the subject of the financing were to be placed

on real property owned by them. For reasons to be discussed further below, this factual dispute is

irrelevant for purposes of the Motion.

The Bank contends that David defaulted on the Lease on or about May 1, 2010,

though that is disputed by the Debtors who claim to lack knowledge of any default. In any event,

it is a matter of public record and undisputed that David and his wife Stacy Charles filed a Chapter

12 bankruptcy petition on June 25, 2010, in this Court at Case No. 10-11172-TPA (“David’s 2010

Case”). A plan was confirmed in David’s 2010 Case on December 8, 2011, but the case was

ultimately dismissed on March 17, 2014, based on a motion for voluntary dismissal filed by the

debtors in which they stated they were unable to continue making plan payments.

On August 9, 2010, the Debtors themselves also filed a case under Chapter 12 at Case

No. 10-11432 (“the 2010 Case”). The Bank filed proof of claim 16-1 in the 2010 case on November

29, 2010, setting forth a claim of $67,202.97 based on the Guaranties. The Bank also filed an

adversary proceeding against the Debtors in the 2010 Case at Adv. No. 11-1027-TPA (“the 2010

Case Adversary”) on February 14, 2011. The complaint in the 2010 Case Adversary alleged that

David had defaulted on the Lease and the Bank had been in the process of pursuing its rights against

the Debtors under the Guaranties when the 2010 Case was filed. It further alleged that the Debtors’

3

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 3 of 16
obligation to the Bank under the Guaranties should be found non-dischargeable pursuant to 11

U.S.C. §523(a)(2)(B) because of false statements they had made to the Bank in the credit application

they submitted in connection with the Lease.

The Debtors filed a motion to dismiss the 2010 Case Adversary, arguing that the

complaint should be dismissed because it did not include a copy of the credit application submitted

by them that supposedly contained false statements, and because they did not receive any direct

benefit as a result of any alleged false statements they had made. The Bank filed a response

opposing the motion to dismiss. At a hearing on the motion to dismiss held on April 8, 2011, the

parties announced that they had reached a tentative agreement to resolve the matter and were in the

process of reviewing a draft settlement agreement. As a result of that information the Court directed

the parties to file a stipulation of settlement by May 9, 2011, or the complaint would be dismissed.

On May 9, 2011, the parties filed a Joint Motion and Stipulation to Entry of Order

Approving Settlement Agreement (“Joint Settlement Motion”), see 2010 Case Adversary Doc. No.

14. In the Joint Settlement Motion the Debtors and the Bank acknowledged that as of the date the

2010 Case was filed the Debtors were liable to the Bank in the amount of $67,202.97 under the

Guaranties. Id. at ¶4. The Joint Settlement Motion also noted that the Debtors “disputed that they

knew or understood that they were signing personal guaranties when executing the Guaranties, and

admit no liability whatsoever to Bank other than as expressly set forth herein.” Id. at ¶7. The

Settlement Agreement which the parties asked the Court to approve included the following

components:

4

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 4 of 16
! The Debtors’ debt to the Bank would be reduced to $30,000

! The Bank would forebear any collection efforts against the

Debtors for the duration of the of the plan in David’s 2010

Case.

! Once the outstanding debt owed by David to the Bank was

reduced to $30,000 in David’s 2010 Case, every further 

reduction thereafter would reduce the Debtor’s liability to the

Bank dollar for dollar.

! The Bank’s right to collect anything from the Debtors would

cease and expire on the complete satisfaction of the

obligations to the Bank under the plan in David’s 2010 Case.

! The Debtors agreed their debt to the Bank would be deemed

non-dischargeable in the 2010 Case, any conversion thereof

to Chapter 7, and any future bankruptcy case filed by either

of the Debtors and they expressly waived the

dischargeability of the debt under any applicable section of

the Bankruptcy Code, including 11 U.S.C. §523(a)(10).

! Upon a default by David, to include a dismissal of David’s

2010 Case, and his failure to cure within 15 days of written

notice of default, the Debtors debt to the Bank would become

immediately due and payable.

The Court approved the Joint Settlement Motion, and therefore the Settlement Agreement, in a May

10, 2011 Order, see Doc. No. 15 in the 2010 Case Adversary. The 2010 Case Adversary was then

closed on May 25, 2011. The 2010 Case itself was ultimately closed on April 28, 2014, based on

a motion for voluntary dismissal filed by the Debtors.

On April 4, 2014, David and Stacy Charles filed another Chapter 12 bankruptcy case

at Case No. 14-10413-TPA (“David’s 2014 Case”). The Bank filed proof of claim 27-1 in the case

in the total amount of $53,233.97, of which $44,250 was claimed as secured. On December 4, 2014, 

5

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 5 of 16
the Debtors in David’s 2014 Case initiated Adv. No. 14-1088-TPA against the Bank, seeking to have

the Bank’s secured claim valued at $10,000, which was alleged to be the value of the two grain bins. 

The Bank filed an answer and the Court scheduled the mater for an evidentiary hearing but before

that occurred or any decision was made the debtors moved to dismiss the adversary for the reason

that they “no longer wishes to pursue this matter,” without further elaborating. That motion to

dismiss was granted and the adversary was closed on May 12, 2015. David’s 2014 Case itself

remains ongoing. A plan was confirmed on February 9, 2015, that provides for the Bank to be paid

$10,000 in annual payments amortized over ten (10) years at 4% interest, resulting in an annual

payment of $1,250 (with the final five payments to be made directly by the debtors after completion

of the plan).

The Debtors filed the within Chapter 12 bankruptcy case (“the 2014 Case”) on June

20, 2014. The Bank initiated the within adversary proceeding on December 1, 2014 and filed proof

of claim 15-1 on December 31, 2014, in the amount of $30,000 on the basis of the May 10, 2011

Order in the 2010 Case Adversary approving the Joint Settlement Motion. 

The Parties agree that the two grain bins that are the collateral for the Lease are still

in the possession of David and have not been taken by the Bank. If and when the collateral is

liquidated by the Bank, the Bank agrees that the Debtors will be entitled to the appropriate credit.

SUMMARY JUDGMENT STANDARD

Fed.R.Bankr.P. 7056 incorporates Fed.R.Civ.P. 56 into bankruptcy adversary

proceedings. Fed.R.Civ.P. 56(a) provides that the Court shall grant summary judgment to the

6

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 6 of 16
moving party “if the movant shows that there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” The Bank, as the moving party, therefore has the

burden to prove the absence of genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986). A fact is material for summary judgment purposes if, under applicable substantive

law, it may affect the outcome of the case. Id. at 325. If the movant shows the absence of genuine

issues of material fact, the nonmoving party must “set forth specific facts showing there is a genuine

issue for trial.” Id. at 322, n. 3. Throughout the analysis, the Court must view the facts in the light

most favorable to the non-moving party, here the Debtors, and draw all inferences in their favor.

Abramson v. William Paterson College of New Jersey, 260 F.3d 265, 276 (3d Cir. 2001).

DISCUSSION

The language of the Settlement Agreement between the Debtors and the Bank clearly

provides that the compromised amount of the debt that the Debtors would owe to the Bank –

$30,000, less any credit that might be applicable due to certain payments made by or on behalf of

David – would be non-dischargeable in the 2010 Case or in any other subsequent bankruptcy case

that the Debtors might file. The Debtors were represented by counsel and presumably made an

informed decision to enter into the Settlement Agreement rather than proceed with the 2010 Case

Adversary and run the risk that the entire debt the Bank was claiming at the time, over $67,000,

would be found non-dischargeable, and that the Bank would immediately pursue them for payment.

See, e.g., Joint Settlement Motion at ¶10 (acknowledgment that each side has had an opportunity to

review the Settlement Agreement with its attorney).

7

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 7 of 16
Despite the seemingly clear language of the Settlement Agreement to the effect that

the debt is not dischargeable, the Debtors now contend that summary judgment should not be

granted for a number of reasons. The Court has reviewed the arguments advanced by the Debtors 

and finds that none have any merit, for the reasons explained below.

First, the Debtors argue that they were misled by the Bank with respect to their

signing of the Guaranties, claiming that they thought they were only being required to sign

something because they owned the real estate on which the grain bins were to be placed. The

problem for the Debtors is that this allegation of having been misled was something known by them

when the Settlement Agreement was reached, and in fact was something set forth in the recitals to

the Settlement Agreement, which were incorporated in full and made part of the Agreement:

WHEREAS, the Debtors dispute that they knew or understood that

they were signing personal guaranties when executing the Guaranties,

and admit no liability whatsoever to Bank other than as specifically

set forth herein.

Settlement Agreement at Recital No. 3, see Motion, Exhibit E. 

In other words, although the Debtors believed that they had been misled as to the

nature of the Guaranties, they nevertheless agreed to voluntarily forego pursuing any claim related

thereto and instead entered into the Settlement Agreement with the Bank, which they then asked

the Court to approve, and which the Court did approve. The Debtors gave up any claim that they

had been misled. See, Paragraph 8 of the Settlement Agreement in which the Debtors agreed to 

8

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 8 of 16
release and waive any claims they might have against the Bank or its agents. This was obviously

part of the quid pro quo that went into the overall settlement, with the Debtors in return obtaining

such benefits as a reduced claim amount, a forbearance from the Bank’s pursuit of the claim for at

least a time, and the possibility of a further reduction in the claim if the Bank were to make a

recovery in David’s 2010 Case. If the Court were to now allow the Debtors to use allegations of

having been misled by the Bank as a defense to the Motion, not only would that be contrary to the

Settlement Agreement, it would also be patently unfair.3 

What the Debtors are really trying to do here is to attack the Settlement Agreement

itself and the May 10, 2011 Order that approved it. That, however, is an improper collateral attack. 

If the Debtors believe the May 10, 2011 Order was improper for some reason and should be

changed or vacated, they are required to attack it directly, for example under Fed.R.Bankr.P. 9024,

something they have failed to do.

The Debtors next argue that they only entered into the Settlement Agreement because

David had promised that he would pay the Bank’s claim. There are numerous flaws in that

argument. The Settlement Agreement does not say anything about the Debtors’ obligations

thereunder somehow being conditional on David carrying out a promise that he would pay. In fact, 

3 The use of analogies to illustrate a point can be hazardous, but the Court will take the

risk here. Consider a circumstance where A sues B for negligently inflicting an injury, seeking

$100,000 in damages. B files an answer raising as a defense that A is barred from any recovery

because of his own contributory/comparative negligence. Subsequently, A agrees to settle the claim

and dismiss the suit in return for B’s promise to pay him $50,000. If A later pursues B for payment

on the $50,000 settlement, no court would allow B to raise contributory/comparative negligence as

a defense because that has already been factored into the parties’ settlement and waived.

9

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 9 of 16
quite to the contrary the Settlement Agreement specifically contemplated the possibility that David

would default in making payments to the Bank and it made the occurrence of such default an event 

that would trigger the obligation of the Debtors to pay. See, Settlement Agreement at Paragraph 6. 

The Settlement Agreement also contains an integration clause (Paragraph 14) and a clause requiring

that any amendments to it be in a writing signed by all parties (Paragraph 17). The Debtors’ attempt

to vary the terms of the Settlement Agreement by in effect making it conditional on the actions of

David is contrary to the terms of the Settlement Agreement, and is likely in violation of the parol

evidence rule as well. See, e.g., In re the Baptist Home of Philadelphia, 525 B.R. 236, 242 (Bankr.

E.D. Pa. 2014). 

The third argument raised by the Debtors is that the Settlement Agreement violates

a public policy of the Bankruptcy Code that debtors can never waive a potential future right of

discharge that they may have in a future bankruptcy filing. The Debtors, however, have cited to no

specific provision in the Bankruptcy Code, or to case law, wherein this public policy principle is

expressly stated, nor can the Court itself find such principle. At most, it might be said that there is

a policy against a debtor agreeing to waive the dischargeability of a debt outside of the setting of a

bankruptcy proceeding. But that is not what happened here; the Settlement Agreement was entered

into to resolve a nondischargeability dispute within a bankruptcy case, and that makes all the

difference.

While there is not an extensive body of case law on the precise point, the cases that

do exist support this conclusion. For instance, in In re Saler, 205 B.R. 737 (Bankr. E.D. Pa. 1997) 

aff’d 217 B.R. 166 (E.D. Pa. 1998), cited by the Bank, the court concluded that a debtor may consent 

10

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 10 of 16
to settle bankruptcy nondischargeability litigation by agreeing that the debt is not dischargeable, and

such agreement will be enforced in a subsequent bankruptcy case as well, just the same as if the

court in the first bankruptcy case had made a determination of non-dischargeability. 205 B.R. at

748-49 (citing cases). 

The Debtors try half-heartedly to distinguish Saler on the grounds that the debt at

issue in that case involved criminal conduct, whereas there is no hint of any criminal wrongdoing

in the present case, but a review of Saler makes clear that any criminal basis for the debt played no

role in the court’s decision. In any event, to avoid that distraction, the Court can point to

Lichtenstein v. Barbanel, 161 Fed. Appx. 461 (6th Cir. 2005). 

 The debtor in Lichtenstein filed a 1991 Chapter 7 bankruptcy case and his ex-wife

filed a proof of claim, objected to his exemptions, sought discovery of his assets, and moved for

additional time to file a complaint objecting to discharge. The debtor and his ex-wife then entered

into a “Stipulation of Nondischargeability” agreement, which was approved by the bankruptcy

court, whereby he agreed to stipulate to the non-dischargeability of any claims she had related to

the dissolution of their marriage in exchange for her withdrawing all pending motions and

objections she had filed in the case and her agreement not to participate further in the bankruptcy

case. The debtor received a discharge in due course and subsequently the state court presiding over

the parties’ divorce entered an order requiring the debtor to make various payments to his ex-wife. 

The debtor then filed a second bankruptcy case in 2004 and simultaneously filed an adversary

proceeding seeking a determination that his debt to his ex-wife from the divorce court order was

11

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 11 of 16
dischargeable. The ex-wife filed a motion to dismiss the adversary on the basis that the “Stipulation

of Nondischargeability” that had been approved by the court in the 1991 bankruptcy was a valid

waiver of discharge, and thus the debt was excepted from discharge under 11 U.S.C. §523(a)(10).4

The bankruptcy court in Lichtenstein agreed with the ex-wife, finding that the

“Stipulation of Nondischargeability” was a waiver of discharge in a prior bankruptcy case, and

therefore under Section 523(a)(10) was res judicata in the subsequent bankruptcy. The district court

affirmed that conclusion, as did the 6th Circuit, finding that the debtor had made a valid and

enforceable waiver that precluded his relitigation of the dischargeability of the same debt in his

subsequent bankruptcy. See also, e.g., In re Laing, 31 F.3d 1050 (10th Cir. 1994) (stipulated

agreement by debtor in prior bankruptcy that debt was non-dischargeable, including a waiver of

discharge in any future bankruptcy, was binding in subsequent case); In re Siebert, 302 B.R. 265

(Bankr. N.D. Ohio 2003) (consent judgment entered in debtor’s prior bankruptcy holding that certain

debt was not dischargeable entitled to res judicata effect to preclude discharge of same debt in

subsequent bankruptcy); In re Klasinski, 215 B.R. 181 (Bankr. C.D. Ill. 1997) (debtor’s settlement 

of nondischargeability action by creditor in prior bankruptcy barred redetermination of that issue

as to same debt in subsequent bankruptcy; even though prior settlement order did not explicitly say 

4 11 U.S.C. §523(a)(10) provides in relevant part:

a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does

not discharge an individual debtor from any debt--

...

(10) that was or could have been listed or scheduled by the debtor in a prior case concerning

the debtor under this title or under the Bankruptcy Act in which the debtor waived

discharge.... 

12

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 12 of 16
debt was nondischargeable that was obviously the parties’ intent); In re Mapother, 53 B.R. 433 

(Bankr. W.D. Ky. 1985) (approving a “Stipulation of Nondischargeability” waiving discharge as to

a single debt); In re Martinelli, 96 B.R. 1011, (9th Cir. BAP 1988) (bankruptcy court did not err in

refusing to set aside a stipulated judgment of nondischargeability that had resolved an adversary

complaint alleging that debt was not dischargeable). The Court thus finds no basis for the Debtors’

argument that the waiver of discharge as set forth in the Settlement Agreement is somehow contrary

to public policy.5

The final argument raised by the Debtors is that the Motion should not be granted

because the amount of debt owed to the Bank is uncertain since the Debtors may be entitled to

credits for payments on the debt made in David’s 2010 Case or David’s 2014 Case, and by any

amount received by the Bank if the collateral is liquidated. The Court agrees with the Debtors that

the amount of the debt is not necessarily fixed at $30,000 because payments received by the Bank

in David’s 2010 Case may have reduced that amount, as provided by language in the Settlement

Agreement. See, id. at Paragraph 5. Indeed, even in the absence of such language, the principle

of not allowing a double recovery might well come into play to prevent the Bank from receiving a

windfall.

5 If anything, the Bank’s position in the present case is even stronger than those of the

creditors in Saler and Lichtenstein. The Settlement Agreement itself specifically provides that the

agreement of non-dischargeability applies in future bankruptcy cases, so the Bank does not even

need to rely on res judicata or Section 523(a)(10) to make its argument. 

13

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 13 of 16
It is understandable that the Debtors could have some concerns in this regard. The

proposed order that the Bank submitted along with the Motion includes as one of its provisions that

“the Debtors’ obligations arising from guaranties are non-dischargeable in the amount of $30,000.” 

That is clearly not correct because $30,000 is the maximum amount of non-dischargeable debt that

the Debtors may owe to the Bank, but it could be less. The Bank itself seems to now concede that

point, indicating that by the Motion it is only seeking to have the debt found to be nondischargeable, not to have the amount of the debt specifically determined.6 The Court will enter

an order accordingly, with the expectation that the Parties will either agree between themselves as

to the proper amount of the debt or file an appropriate further proceeding if they cannot do so and

need the Court to so decide.

The Court will close with the observation that not only is the result reached here in

accordance with what the law provides, it also makes eminent sense from a practical standpoint. 

The Debtors having previously agreed to waive the dischargeability of their debt to the Bank in the

6 An e-mail message from the Bank’s attorney sent in response to an inquiry from the

Court’s staff about the Parties’ understanding as to what was at issue in the Motion stated:

The collateral is still in possession of the Debtors. The collateral is

expected to be released to the Bank and will need to be liquidated. 

Of course, the Debtors will receive credit for the collateral after

liquidation. 

With that in mind, what is in dispute in the instant proceeding is

whether the debt itself is non-dischargeable, not what amount can be

collected from the Debtor following satisfaction on any other

collateral.

June 9, 2015 e-mail to the Court’s law clerk and Debtors’ attorney from the Bank’s attorney.

14

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 14 of 16
face of allegations that they had submitted false information in their credit application, and having

thereby gained concessions such as a reduction in the amount of the debt and the avoidance of a trial

on the merits, should not now be given a second bite at the apple. To hold otherwise would invite

chaos and open the door to the potential for litigation gamesmanship and abuse. In a case holding

that a finding of non-dischargeability in an earlier bankruptcy based on dishonest dealing with

creditors was binding in a second bankruptcy case, the court stated:

The general principle is that other types of exception to discharge,

especially under § 523(a)(2), (4) or (6), do involve “dishonest dealing

with the creditors,” which circumstances do not change in a second

bankruptcy case. When the dishonest circumstances and

nondischargeable character of such a debt have been judicially

determined once, they need not be determined again. Indeed, such

matters should not be litigated again; for such relitigation would

promote repetitive bankruptcies, harass creditors, waste judicial

resources, and misuse procedural mechanisms so as to obstruct, rather

than facilitate, disposition of disputes on their merits. In Collier's

words, “[t]here is ... sound reason why a debtor should be forever

barred from having such debt[s] discharged.” 

In re Szafranski, 147 B.R. 976, 988 (Bankr. N.D. Okl. 1992).7 This Court agrees completely with

that view and will not permit the Debtors to walk away from their previous agreement so long as the

May 10, 2011 Order remains in effect.

7 In so holding, the Szafranski court distinguished other exceptions to discharge that do not

involve a debtor’s dishonest dealing with creditors, for example under 11 U.S.C. 523(a)(1). Depending on

changed circumstances, such as the passage of additional time, such debt can potentially be discharged in

a second bankruptcy even after having being held non-dischargeable in a first bankruptcy. The Bankruptcy

Code itself recognizes this distinction. See, 11 U.S.C. §523(b). The present case does not involve that other

type of exception to discharge.

15

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 15 of 16
CONCLUSION

For all of the foregoing reasons, the Court finds that there are no material factual

issues in dispute and that the Bank is entitled to the relief it seeks. The Motion will be granted. An

appropriate order follows.

Dated: July 2, 2015 _________________________________

Thomas P. Agresti, Judge

United States Bankruptcy Court

Case administrator to serve:

Crystal Thornton-Illar, Esq.

Brian Thompson, Esq.

Debtors

16

Case 14-01084-TPA Doc 32 Filed 07/06/15 Entered 07/06/15 09:39:50 Desc Main

Document Page 16 of 16