Fedderson ran Big Al’s restaurant, which was doing poorly. In a last-ditch effort to make more money, he bought a $2,000 ice cream machine for Big Al’s on his personal credit card. Sixty days later, Fedderson filed for bankruptcy. The credit card company argued that the ice cream machine debt should not be discharged because it is a luxury good that was bought too close to the bankruptcy petition.

CASE QUESTIONS

1. Should the ice cream machine debt be discharged?

2. Should it matter to the court that Fed person should have known that he would be insolvent in two months and that trying to stop a financial catastrophe with an ice cream machine was foolish?