[1] The method of determining whether a petition for bankruptcy constitutes abuse of bankruptcy procedure, which is a general ground for dismissing a petition for bankruptcy under Article 309(2) of the Debtor Rehabilitation and Bankruptcy Act

[2] The case holding that the court below's dismissal of a petition for bankruptcy pursuant to Article 309 (2) of the Debtor Rehabilitation and Bankruptcy Act by deeming the petition for bankruptcy filed by the debtor as abuse of bankruptcy procedure, which committed an act that constitutes the grounds for non-permission of discharge of liability, is acceptable, and that such a judgment cannot be viewed as making the debtor unfairly lose the opportunity for discretionary discharge of liability by dismissing the petition for bankruptcy

[1] Separate from Article 309(1) of the Debtor Rehabilitation and Bankruptcy Act, Article 309(2) provides that “when an application constitutes an abuse of bankruptcy procedures,” the court may dismiss the petition for bankruptcy separately from “when the application constitutes an abuse of bankruptcy procedures.” In light of the above Article 309(2), whether the petition for bankruptcy constitutes an abuse of bankruptcy procedures should be determined by comprehensively taking into account all the circumstances related to the exercise of the right, as in other general provisions. In particular, in light of the legislative history, language, and structure of the above legal provision, it should be determined by taking into account the legislative history, language, and structure of the bankruptcy system, which seeks to ensure a new and sincere commencement of the debtor while ensuring the fair and fair satisfaction of the creditor, the debtor’s current and future ability to repay, as well as the motive and circumstance leading up to the petition for bankruptcy, the cause and behavior of insolvency, and the circumstances leading to the debtor’s failure to obtain information on the bankruptcy procedures, the existence of the grounds for exemption can be acknowledged as an abuse of bankruptcy procedures.

[2] The case affirming the judgment below dismissing a bankruptcy petition as an abuse of bankruptcy procedure under Article 309 (2) of the Debtor Rehabilitation and Bankruptcy Act on the ground that the debtor's bankruptcy petition committed an act falling under the grounds for non-permission of discharge, such as neglecting all of his/her own inheritance shares in the inherited property of his/her spouse in the situation where the debtor bears the creditor's obligation, allowing the head of South-North-Nam to inherit the inherited property independently, and having the debtor dispose of part of the inherited property after he/she inherited the inherited property, but not stated in the bankruptcy application form, and making false statements as to his/her property status by stating that he/she did not have inherited property, etc., and thus, the court below rejected the bankruptcy petition as an abuse of bankruptcy procedure, and it cannot be deemed that such a judgment unfairly dismissed

[1] Articles 309 and 564(1) of the Debtor Rehabilitation and Bankruptcy Act / [2] Articles 309(2), 564(1)1 and 3, and 650 subparag. 1 of the Debtor Rehabilitation and Bankruptcy Act

[1] Supreme Court Order 2008Ma1904, 1905 dated May 28, 2009 (Gong2009Ha, 1007)

Re-appellant (debtor)

Busan District Court Order 2009Ra463, 464 dated September 15, 2010

The reappeal is dismissed.

1. Separate from Article 309(1) of the Debtor Rehabilitation and Bankruptcy Act, Article 309(2) provides that “when an application constitutes an abuse of bankruptcy procedures,” the court may dismiss the application for bankruptcy, separately from Article 309(2) provides that “when the application constitutes an abuse of bankruptcy procedures.” As such, Article 309(2) provides that “when the application constitutes an abuse of bankruptcy procedures,” whether the application for bankruptcy constitutes an abuse of bankruptcy procedures should be determined by comprehensively taking into account all the circumstances related to the exercise of the right, as in other general provisions.

In particular, in light of the legislative history, language, and regulatory structure of the above legal provisions, in order to ensure a debtor's new starting from a suspended and sincere debtor's discharge, and to ensure the debtor's fair and satisfactory discharge of the original function of the bankruptcy system or other insolvency system, the debtor's present and future performance ability are excessive (see Supreme Court Order 2008Ma1904, 1905, May 28, 2009). In addition, in addition, the motive and circumstance leading up to the bankruptcy petition, the cause of insolvency, and the related interested parties' behavior related to the bankruptcy procedure, the accuracy of various information provided by the debtor in connection with the bankruptcy procedure, and the expenditure scheduled by the debtor, etc. In addition, where a bankruptcy petition is filed for the purpose of obtaining the debtor's discharge ultimately, such circumstance can be evaluated as an abuse of bankruptcy procedure if it is acknowledged that there is a ground for refusing to grant the debtor's discharge. Meanwhile, even if the debtor loses the opportunity to grant the discharge in consideration of the circumstances leading up to the loss of the court's discharge discretion.

2. The lower court admitted the first instance court’s decision and rendered fact-finding and judgment.

A. The facts acknowledged by the court below are as follows.

The debtor and her husband non-applicant 1 borrowed money several occasions from the creditor non-applicant 2, and through the non-applicant 2, they borrowed 36 million won from the creditor non-applicant 3 even through the non-applicant 3. The non-applicant 1 died on December 11, 1999. The debtor prepared a loan certificate stating that he borrowed 36 million won from the non-applicant 3 on September 3, 2001, and the non-applicant 2 signed and sealed it as a joint guarantor.

On December 28, 2005, the non-applicant 2 filed a lawsuit against the debtor as Busan District Court 2005da591368, and the above court rendered a judgment ordering the debtor to pay the loan amounting to KRW 12 million on September 5, 2006, and the above judgment became final and conclusive. In addition, the non-applicant 2 paid the debtor to the re-appellant as above on March 13, 2008, the non-applicant 208 filed a lawsuit against the debtor as Busan District Court 2008Da38017, and the above court ordered the debtor to pay the loan amounting to KRW 38,039,059 on November 18, 2008 and the damages for delay became final and conclusive.

Meanwhile, at the time of death, non-applicant 1 owned a 194m2 and a fishing vessel and a farm farm in Gangseo-gu, Busan as inherited property at the time of death. They succeeded to 4m2 and non-applicant 4, and on October 25, 2002, non-applicant 4 sold the land located in the above name-dong to non-applicant 5.

At the time of the petition for bankruptcy of this case, the debtor did not enter the details on the disposal, etc. of inherited property due to the death of relatives, such as non-party 1, etc., and stated that there was no inherited property.

B. Furthermore, the lower court determined as follows, dismissed the debtor’s bankruptcy petition and dismissed the application for immunity filed simultaneously with the foregoing.

In other words, under the circumstance that the debtor bears the obligation against the non-applicant and the non-applicant and the non-applicant and the non-applicant and the non-applicant and the non-applicant and the non-applicant and the non-party 4 shall inherit the inherited property independently. Such an act constitutes “the act of concealing or damaging the property belonging to the bankrupt estate for the purpose of promoting his own interest or any other person or impairing the creditor”, which is a ground for denying the immunity stipulated in Articles 564(1)1 and 650 subparag. 1 of the Debtor Rehabilitation and Bankruptcy Act.

In addition, even though the debtor did not independently inherit the non-applicant 1's inherited property and disposed of part of the inherited property after the non-applicant 4 inherited property, he did not state the above contents in the bankruptcy application form and made a false statement as to his property status by stating that there was no inherited property. Such an act constitutes "when the debtor submits a false list of creditors or other application documents, or makes a false statement with the court as to his property status," under Article 564 (1) 3 of the above Act.

Therefore, it can be said that the debtor's filing of a petition for bankruptcy is an abuse of bankruptcy procedure, and thus, the petition for bankruptcy of this case is dismissed in accordance with Article 309 (2) of the above Act.

3. Examining the records in light of the legal principles as seen earlier, the court below’s dismissal of the petition for bankruptcy of this case by deeming it an abuse of bankruptcy procedure is acceptable. The judgment of the court below cannot be deemed to have unfairly dismissed the petition for bankruptcy, thereby allowing the debtor to lose the opportunity to receive discretionary exemption. The judgment of the court below is not erroneous as otherwise alleged in the ground for reappeal.

4. Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)