In re Madaj

Madaj and his wife (plaintiffs) borrowed a large sum from Madaj's parents (defendants) without repaying it, then filed Chapter 7 bankruptcy without listing that debt among their scheduled liabilities; the parents, unaware of the bankruptcy, obtained a state-court judgment against the children after their debts had already been discharged. The children moved to reopen their closed Chapter 7 case to formally schedule the parental debt and have it discharged; the parents opposed, and the bankruptcy court denied the motion to reopen but ruled the debt was nonetheless already discharged, a decision the district court affirmed and the parents appealed.