Massachusetts Bankruptcy Court Rules ADHD No Defense to Denial of Chapter 7 Discharge

In a recent decision by the United States Bankruptcy Court for the District of Massachusetts, the Court rejected a debtor’s attempt to excuse numerous omissions from his schedules of assets and inconsistent testimony under oath based on the Debtor’s claim that his ADHD (Attention Deficit Hyperactivity Disorder)prevented him from forming an intent to conceal or omit assets required to be disclosed under applicable sections of the bankruptcy code.


The court, in Robin Singh Educational Services, Inc., d/b/a Testmasters v. Thomas P. McCarthy held that the Debtor was not entitled to a discharge under 11 U.S.C. section 727(a)(2), (3) and (4), because the debtor had failed to list various assets, including a bank account opened in his father’s name, prior to the filing of the bankruptcy case, omitted other bank accounts, and underreported the amounts in other accounts. The Debtor had argued that the omissions were a direct result of his medical condition, and not the product of an intent to conceal assets or make a false oath such as would be grounds for a denial of discharge under section 727(a)(2) and (4). The Court rejected the debtor’s “ADHD defense” , presented through expert testimony by a psychiatrist, in part because the debtor’s expert was unable to testify as to the debtor’s specific intent (but only as to the difficulties ADHD patients generally experience in organizing, remembering and accounting for their finances and specific financial transactions) and also because the Court found that the debtor had engaged in a deliberate “contrivance” and pattern of concealment which belied the ADHD defense.


The court also found that a denial of the debtor’s discharge was warranted under section 727(a)(3) due to the debtor’s failure to keep adequate records or to meet his burden to satisfactorily explain their unavailability.

The Court also found that while the relatively modest assets the Debtor had attempted to conceal may have been exempt, the debtor had a duty to disclose them and failed to do so even after multiple amendments to his schedules. This last issue points to the irony of the situation where the debtor could have avoided a denial of his discharge by disclosing his assets and claiming them exempt. In that event, the debtor would likely have emerged from bankruptcy with his assets intact and a discharge of his debt. Instead, the debtor now has to contend with a massive, non-dischargeable debt to the Plaintiff/creditor in excess of half a million dollars.


The case is Robin Singh Educational Services, Inc., d/b/a Testmasters v. Thomas P. McCarthy (In re: McCarthy), Case No.: 10-11788 JNF and is available for viewing here.

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