## Facts

- James and Jackie Mitchell filed a Chapter 7 bankruptcy petition.
- In their initial sworn schedules and statements, the Mitchells made multiple misstatements and omissions, including:
  - reporting only half of their monthly income in response to a prompt calling for total monthly income,
  - listing incorrect cash and face values for a life-insurance policy,
  - failing to disclose certain payments to creditors made within 90 days before filing,
  - listing a claim by The Cadle Company as a liability while not listing the Mitchells’ counterclaim against Cadle as an asset,
  - omitting or undervaluing James Mitchell’s vintage car-refurbishing tools, and
  - omitting a set of Wedgwood china.
- The Mitchells said they completed the paperwork quickly and did not review attorney-prepared forms for accuracy before signing under oath.
- The Mitchells later amended their filings, but the amendments corrected only the life-insurance values and the characterization of the Cadle counterclaim.
- Cadle, as a creditor, objected to discharge, alleging the Mitchells made knowing and fraudulent false oaths in their bankruptcy filings.
- The bankruptcy court granted the Mitchells a discharge, finding no fraudulent intent and characterizing the inaccuracies as minor mistakes; it also noted that some accurate information could be found elsewhere in the petition materials.
- On appeal, the district court reversed and concluded discharge should be denied based on the multiple false oaths.
- The Mitchells appealed to the U.S. Court of Appeals for the Fifth Circuit.

## Issues

1. Whether the Mitchells’ numerous omissions and inaccuracies in sworn bankruptcy schedules and related filings constituted “knowing and fraudulent” false oaths warranting denial of discharge under 11 U.S.C. § 727(a)(4)(A).
2. Whether a pattern of errors and omissions may support an inference of fraudulent intent when the record shows at least reckless disregard for the truth in completing bankruptcy filings.

## Decision

- The Fifth Circuit affirmed the district court’s decision denying the Mitchells a Chapter 7 discharge.
- The court concluded that the quantity and nature of the Mitchells’ misstatements and omissions supported denial of discharge under § 727(a)(4)(A).
- The court treated the repeated inaccuracies in sworn filings as sufficient to show the required fraudulent intent at least where they reflected reckless disregard for the truth, despite the Mitchells’ claim of haste and lack of review.

## Legal Principles

- A discharge may be denied under 11 U.S.C. § 727(a)(4)(A) when a debtor makes a false oath or account in connection with the bankruptcy case and does so knowingly and fraudulently.
- Fraudulent intent under § 727(a)(4)(A) may be shown by circumstantial evidence and inferred from a debtor’s course of conduct, including a series of omissions or misstatements in schedules and statements signed under oath.
- Reckless indifference or reckless disregard for the truth in preparing and signing bankruptcy filings can satisfy the intent element for a § 727(a)(4)(A) false-oath claim.
- The debtor bears responsibility for the accuracy and completeness of sworn schedules and statements; blaming haste or failure to review counsel-prepared filings does not, by itself, defeat an intent finding when the overall record supports reckless disregard.
- The existence of correct information elsewhere in the petition materials does not automatically cure false statements or omissions in the sworn schedules and statements when the inaccuracies are material and repeated.

## Conclusion

In re Mitchell holds that Chapter 7 debtors risk denial of discharge under § 727(a)(4)(A) when they submit sworn schedules and statements containing numerous material omissions and misstatements, because a repeated pattern of inaccuracies can support an inference of fraudulent intent based on reckless disregard for the truth; applying that principle, the Fifth Circuit affirmed the district court’s denial of the Mitchells’ discharge.


In re Mitchell, 102 F. App’x 860 (2004)