Threat of “Your Money or Your Body” Renders Payment Involuntary

Bankruptcy courts are faced every day with applying provisions of the Bankruptcy Code to real-world situations that were not contemplated by the drafters of the statute. In their most recent article for The Legal Intelligencer, Chairman and CEO Andy Kassner and Corporate Restructuring associate Joe Argentina cover one such case that they say clearly falls into the category of “you can’t make this stuff up.”

Their article, titled “Threat of ‘Your Money or Your Body’ Renders Payment Involuntary,” discusses In re Schmitt, a case in the U.S. Bankruptcy Court for the Eastern District of Wisconsin in which a Chapter 7 trustee took the position that a 74-year-old man suffering from various illnesses, who was thrown in jail on a bench warrant and told by deputy sheriffs “your body or your money,” could be said to have voluntarily paid the bench warrant, when his only other option was to remain in jail. In an 11-page decision, Bankruptcy Judge Beth Hanan concluded that the transfer was not voluntary because the debtor “faced immediate severe consequences: loss of liberty or loss of funds.”

Read "Threat of 'Your Money or Your Body' Renders Payment Involuntary."