Household Finance Corporation v. Walters

MOLLOY, Judge.

This appeal raises the question of whether, following a borrower’s discharge in bankruptcy, a small loan company can recover the entire amount of a “renewal loan” made by it in reliance upon a false financial statement of the borrower, or whether recovery is limited to the amount of “new money” or “fresh cash” advanced by the loan company at the time the false statement is made.

Clarity will be served by immediate reference to the applicable law.

Prior to 1960, Section 17 of the Bankruptcy Act, 11 U.S.C.A. § 35, entitled “Debts not affected by a discharge,” provided, in pertinent…