The bankrupt applied for a discharge under the Bankruptcy and Insolvency Act after accumulating approximately $150,000 in unsecured debt from a student line of credit issued by a bank to fund medical education at an offshore institution.
The opposing creditor argued the bankrupt misused funds, contributed to his bankruptcy through gambling, and failed to pursue the intended medical career.
The court found that the bank had advanced substantial unsecured credit to a teenager before admission to medical school and without restrictions on use, reflecting flawed underwriting and a misunderstanding between the parties.
The bankrupt’s failure to complete medical training and the collapse of a side business were not attributable to misconduct warranting denial of discharge.
A conditional discharge was granted requiring payment of 5% of the original credit line.
