Act of July 12, 1960, Pub. L. 86-621, 74 Stat. 408
An Act To amend the Bankruptcy Act to limit the use of false financial statements as a bar to discharge
Eighty-Sixth Congress, Session II · Approved July 12, 1960
Limits the use of false financial statements as a bar to discharge and rewrites the list of nondischargeable debts. Under the new section 14c(3) a false written financial statement bars discharge only if the bankrupt obtained money, property or credit on it “while engaged in business as a sole proprietor, partnership, or as an executive of a corporation.” The rewritten section 17a excepts from discharge taxes; liabilities for false pretenses or representations, including money, property or credit obtained on a materially false written financial statement made with intent to deceive; willful and malicious injuries, alimony, maintenance, seduction and criminal conversation; unscheduled debts; fraud, embezzlement, misappropriation or defalcation in a fiduciary capacity; wages earned within three months (now expressly including whole- or part-time commission salesmen); and moneys of an employee held to secure performance of an employment contract.
This is an unofficial transcription, prepared by Robert J. Pfister for ease of reading and copying. The authoritative text is the United States Statutes at Large.
United States Statutes at Large (PDF, 2 pages) (opens in a new tab) Unofficial transcription (PDF, 2 pages) (opens in a new tab)
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 14c(3) of the Bankruptcy Act, as amended (11 U.S.C. 32(c)(3)), is amended to read as follows:
“(3) while engaged in business as a sole proprietor, partnership, or as an executive of a corporation, obtained for such business money or property on credit or as an extension or renewal of credit by making or publishing or causing to be made or published in any manner whatsoever a materially false statement in writing respecting his financial condition or the financial condition of such partnership or corporation; or”
Sec. 2. Subdivision a of section 17 of the Bankruptcy Act, as amended (11 U.S.C. 35a), is amended to read as follows:
“a. A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except such as (1) are due as a tax levied by the United States, or any State, county, district, or municipality; (2) are liabilities for obtaining money or property by false pretenses or false representations, or for obtaining money or property on credit or obtaining an extension or renewal of credit in reliance upon a materially false statement in writing respecting his financial condition made or published or caused to be made or published in any manner whatsoever with intent to deceive, or for willful and malicious injuries to the person or property of another, or for alimony due or to become due, or for maintenance or support of wife or child, or for seduction of an unmarried female, or for breach of promise of marriage accompanied by seduction, or for criminal conversation; (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy; (4) were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity; (5) are for wages which have been earned within three months before the date of commencement of the proceedings in bankruptcy due to workmen, servants, clerks, or traveling or city salesmen, on salary or commission basis, whole or part time, whether or not selling exclusively for the bankrupt; or (6) are due for moneys of an employee received or retained by his employer to secure the faithful performance by such employee of the terms of a contract of employment.”
Approved July 12, 1960.