                                                               FILED
                                                               SEP 30 2011
 1
                                                          SUSAN M SPRAUL, CLERK
 2                         NOT FOR PUBLICATION               U.S. BKCY. APP. PANEL
                                                             O F TH E N IN TH C IR C U IT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.    CC-10-1342-SaPaKi
                                   )
 6   JONG E. SONG,                 )      Bk. No.    RS 08-15238-MJ
                                   )
 7                  Debtor,        )      Adv. No.   RS 08-01291-MJ
     ______________________________)
 8                                 )
     JONG E. SONG,                 )
 9                                 )
                    Appellant,     )
10                                 )
          v.                       )      M E M O R A N D U M*
11                                 )
     BARBARA A. ACOSTA;            )
12   DEBRA M. NILA,                )
                                   )
13                  Appellees.     )
     ______________________________)
14
15                   Argued and Submitted on May 13, 2011,
                            at Pasadena, California
16
                           Filed – September 30, 2011
17
               Appeal from the United States Bankruptcy Court
18                 for the Central District of California
19        Honorable Meredith A. Jury, Bankruptcy Judge, Presiding
                       _____________________________
20
     Appearances:     W. Derek May of Law Offices of Stephen R. Wade,
21                    P.C., argued for Appellant.
22                    Arnold Wuhrman of Serenity Legal Services,
                      Murrieta, California, argued for the Appellees.
23                       _____________________________
24   Before: SARGIS,** PAPPAS, and KIRSCHER, Bankruptcy Judges.
25
26
          *
             This disposition is not appropriate for publication.
27
     Although it may be cited for whatever persuasive value it may
28   have, see Fed. R. App. P. 32.1, it has no precedential value.
     See 9th Cir. BAP Rule 8013-1.
          **
            Hon. Ronald H. Sargis, Bankruptcy Judge for the Eastern
     District of California, sitting by designation.
 1        Defendant Jong E. Song (“Debtor”), the debtor in the
 2   underlying Chapter 7 bankruptcy case, appeals from a judgment
 3   denying him a bankruptcy discharge pursuant to 11 U.S.C.
 4   § 727(a)(4)(A).1   Because the unchallenged findings support the
 5   bankruptcy court’s decision, the bankruptcy court correctly
 6   applied the law, its factual findings are supported by the
 7   record, and the one arguable error the bankruptcy court made was
 8   harmless, we AFFIRM.
 9                          I. SUMMARY OF THE CASE
10        This appeal is taken from a judgment denying the Debtor his
11   discharge based on a violation of § 727(a)(4)(A), the giving of a
12   false oath or account in or in connection with his case.      The
13   Debtor commenced a Chapter 7 case on May 7, 2008, by the filing
14   of a petition, which was not accompanied by schedules or the
15   statement of financial affairs.    On May 22, 2008, the Debtor
16   filed with the assistance of counsel his schedules and statement
17   of financial affairs; the accuracy of the information disclosed
18   therein became the focus of this adversary proceeding.    Nearly
19   ten months later, on March 11, 2009, the Debtor filed a
20   substitution of counsel; amended Schedules B, F, I, and J; and an
21   amended statement of financial affairs.    When all the pleadings
22   relevant to this appeal were filed, the Debtor was represented by
23   counsel.
24        The Debtor is a medical doctor.    In 2004, two of his
25
26        1
             Unless otherwise indicated, all chapter, section, and
27   rule references are to the Bankruptcy Code, 11 U.S.C. §§ 101-
     1532, and to the Federal Rules of Bankruptcy Procedure, Rules
28   1001-9037.

                                       -2-
 1   employees, Barbara Acosta and Debra Nila (“Plaintiffs”), accused
 2   the Debtor of misconduct during their employment.    After
 3   complaining directly to the Debtor, the Plaintiffs also reported
 4   his conduct to the California Medical Board and the Medical Board
 5   commenced an investigation.    The Debtor was subsequently involved
 6   in a physical confrontation with the husband of one of the
 7   Plaintiffs, which resulted in the filing of a minor criminal
 8   charge against the Debtor.    Through 2004 and the first half of
 9   2005 the Debtor continued with his profitable medical practice,
10   the Medical Board proceeded with its investigation, and no
11   lawsuits were filed by or against the Debtor.
12        Sang Song, the Debtor’s wife of 37 years, filed for
13   dissolution of their marriage in December 2004.    The dissolution
14   was uncontested, with Sang Song and the Debtor entering into a
15   written agreement on March 31, 2005, for the dissolution of their
16   marriage.   A Judgment of Dissolution was entered on May 13, 2005,
17   which incorporated the written dissolution agreement.    Because
18   they concluded that physical separation was not practical, the
19   Debtor and Sang Song continued to live in the same home.     The
20   dissolution agreement provided for the division of assets between
21   Sang Song and the Debtor, with Sang Song receiving the family
22   home, and quitclaim deeds were recorded.    Additionally, under the
23   dissolution agreement Sang Song waived the right to spousal
24   support.
25        While the dissolution was properly documented and final
26   judgment was entered by the state court, the Debtor and Sang Song
27   did not disclose their divorce to family or friends.    The Debtor
28   and Sang Song entered into an agreement allowing the Debtor to

                                      -3-
 1   pay between $2,500 and $3,000 per month to Sang Song for room,
 2   board, and other living expenses.      As of the dissolution, the
 3   Plaintiffs had not asserted any claims against the Debtor or
 4   threatened to sue him.    However, in September 2006, the Debtor
 5   commenced multiple lawsuits against the Plaintiffs and the
 6   husband of one the Plaintiffs.    The litigation did not go well
 7   for the Debtor, with judgments entered against him on all three
 8   suits including awards in favor of the Plaintiffs for $40,258 in
 9   damages and $40,906 in attorneys’ fees and costs.
10        The Debtor attempted to set aside the judgments, ultimately
11   failing in each effort.    The Plaintiffs, through their attorney,
12   began aggressive collection efforts against the Debtor, including
13   executing on his business checking account and attempting to
14   execute on his profit-sharing plan in March or April 2008.        In
15   response, the Debtor stopped using his business checking account
16   and paid his business expenses through Sang Song’s personal
17   checking account.   Sometime in May 2008 the Debtor established a
18   new business checking account.
19        The testimony at trial was not clear how monies transferred
20   through Sang Song’s checking account were reconciled and
21   accounted for between the Debtor and Sang Song.      The Debtor
22   testified that he repaid Sang Song — with some payments being
23   pre-petition and not disclosed on the statement of financial
24   affairs filed by the Debtor under penalty of perjury — to balance
25   the books for the use of her checking account.      The Debtor was
26   free to use Sang Song’s checking account from March 2008 through
27   May 2008 because Sang Song was traveling in Korea using $10,000
28   given to her by the Debtor.

                                      -4-
 1        In response to Plaintiffs’ state-court judgment enforcement
 2   efforts against the profit-sharing account, the Debtor filed two
 3   claims of exemptions in state court.      The state-court judge
 4   denied the claims of exemption, leaving the Plaintiffs free to
 5   execute against the profit-sharing account.      Having failed in
 6   state court, the Debtor then obtained representation from what
 7   the bankruptcy court describes as well-respected consumer-
 8   bankruptcy counsel and commenced the Chapter 7 case.2
 9        The Debtor’s original and amended Schedules and Statements
10   of Financial Affairs became the focus of this adversary
11   proceeding to deny his discharge.       The Plaintiffs commenced the
12   adversary proceeding contending, among other grounds, that the
13   Debtor should be denied a discharge because he had knowingly and
14   fraudulently, in or in connection with the bankruptcy case, given
15   a false oath or account. § 727(a)(4)(A).
16        After a four-day trial, the bankruptcy court determined that
17   the Debtor had knowingly and fraudulently given a false oath in
18   his Chapter 7 case with respect to the following information:
19        1.   Neither the original nor the amended statement of
20   financial affairs disclosed the payment of $10,000 to the
21   Debtor’s ex-wife in early 2008.
22        2.   Neither the original nor the amended statement of
23   financial affairs disclosed the withdrawal of $9,000 by the
24   Debtor from his business (a sole-proprietorship medical practice)
25   account, which was used to pay either Betty Song, his daughter,
26   or other expenses outside the ordinary course of business.        The
27
          2
             The facts stated in the Summary of Case are taken from
28
     the Bankruptcy Judge’s decision.

                                       -5-
 1   bankruptcy court found the Debtor’s testimony to be that he paid
 2   Betty Song in 2007 and 2008.
 3        3.     To the extent the Debtor asserts that the payment of
 4   $10,000 in early 2008 to his ex-wife was repayment of a debt, it
 5   was not disclosed in either the original or amended statement of
 6   financial affairs in response to Question 3.
 7        4.     Neither the original nor amended statements of
 8   financial affairs disclosed substantial payments made to the
 9   Debtor’s various attorneys during the two-year period preceding
10   the Debtor filing his bankruptcy case.
11        5.     Neither the original nor amended schedules or statement
12   of financial affairs disclosed that the Debtor discontinued the
13   use of his business checking account the month before the
14   bankruptcy case was filed or transfers into and out of an account
15   of his ex-wife, Sang Song, for the operation of his business.
16        6.     The original Schedule I (“Current Income of Individual
17   Debtor(s)”) did not disclose the Debtor’s substantial Social
18   Security income, and the omission was not corrected for ten
19   months.
20        7.     The original Schedule J (“Current Expenditures of
21   Individual Debtor(s)”) did not accurately state the Debtor’s
22   expenses.    While the Debtor’s actual monthly expenses for room,
23   board, and other living expenses were a lump-sum of $3,000 he
24   paid to his ex-wife, the Debtor stated in Schedule J itemized
25   expenses, which did not exist.    The itemized expenses are
26   inaccurately stated on Schedule J, totaling $3,910.
27        8.     Neither Schedule G disclosed an executory contract
28   obligating the Debtor to pay $2,500 to $3,000 a month to Sang

                                      -6-
 1   Song.       The bankruptcy court cited to the written agreement,
 2   offered as part of Exhibit 247.
 3          9.      The Original and Amended Schedule F misstated unsecured
 4   claims purportedly owed to members of the Debtor’s family.         The
 5   obligation to Sang Song was not a loan and the Debtor had no
 6   basis for listing a claim for Betty Song, his daughter, because
 7   he testified that (1) he did not expect to pay Betty Song and (2)
 8   Betty Song never billed him for any legal services she provided
 9   him.
10          10.     Neither the original nor amended Schedule F list any
11   business debts relating to the Debtor’s sole-proprietorship
12   medical practice.3
13          11.     Both the Original and Amended Schedule B filed by the
14   Debtor inaccurately state that the Debtor was due a tax refund of
15   $27,000.       In the Fall of 2009 the Debtor testified that the
16   actual refund he expected was $5,000.
17          The bankruptcy court determined that this bankruptcy filing
18   was part of the Debtor’s strategy to flee from the creditors
19   whose judgments arose from his own litigious nature.       Using the
20   bankruptcy filing to block the Plaintiffs, the bankruptcy court
21   further determined that the Debtor sought to maintain his life as
22   normal — maintaining his medical practice without fear that the
23   Plaintiffs would enforce their judgment against his business bank
24   accounts and protect his threatened profit-sharing plan.       On the
25
             3
26           Both the Original and the Amended Schedule I filed by the
     Debtor state that the Debtor’s medical practice generates $20,502
27   a month in income and J states that the Debtor has monthly
     expenses of $19,152 for his sole-proprietorship medical practice.
28

                                         -7-
 1   personal side, the Debtor sought to continue his usual living
 2   arrangement with his ex-wife, paying her money for living
 3   expenses if and when he determined appropriate.
 4        In not disclosing both the $10,000 he paid to his ex-wife
 5   for her trip to Korea just before he filed for bankruptcy
 6   (whether as repayment of a “loan” or as a gift), and the other
 7   monies for living expenses, the bankruptcy court concluded that
 8   the Debtor sought to hide the monies from potential recovery by a
 9   bankruptcy trustee.   As with the transfers to his ex-wife, the
10   Debtor was motivated to not disclose payments he made to his
11   daughter, Betty Song, in   2007 or 2008 for which there were no
12   billings or other documentation that any obligation was owed in
13   the ordinary course of business.   For his other attorneys who
14   were fighting the Plaintiffs and defending the criminal matter,
15   the Debtor sought to keep them working and to protect the
16   undisclosed sums he had paid to them from actions by the Chapter
17   7 trustee.
18        The bankruptcy court determined that the inaccurate or
19   omitted statements, which were made under oath, were material to
20   the Debtor’s bankruptcy case and were made by the Debtor with a
21   knowing, fraudulent intent.   The bankruptcy court further found
22   that many of the statements or omissions were made with such
23   reckless disregard for the truth or completeness thereof that
24   they demonstrated an intent by the Debtor to not provide accurate
25   information.   When this reckless disregard of the truth was
26   coupled with the Debtor’s apparent motive to favor his family,
27   ex-wife, and attorney creditors, and to hide income, assets, and
28   transfers from his known creditors, the knowing intent of the

                                     -8-
 1   Debtor to misstate the information in the schedules and statement
 2   of financial affairs was established to the bankruptcy court’s
 3   satisfaction.
 4        Having determined that the Debtor made intentional, knowing,
 5   fraudulent statements under oath in his schedules and statement
 6   of financial affairs, the bankruptcy court denied the Debtor his
 7   discharge pursuant to § 727(a)(4)(A).
 8                              II. ISSUES
 9        1. Whether the bankruptcy court improperly considered post-
10   petition disallowance of claims in determining if the Debtor made
11   a false oath under § 727(a)(4)(A).
12        2. Whether the bankruptcy court erred when it considered the
13   Debtor’s nondisclosure of his social security income when it
14   found that the Debtor had made a false oath.
15        3. Whether the bankruptcy court’s characterization of the
16   Debtor’s misstatements of fact in his schedules and statements as
17   “wild guesses” is supported by the evidence.
18        4. Whether the bankruptcy court erroneously considered the
19   nondisclosure of business creditors on Debtor’s Schedule F when
20   no evidence was adduced at trial regarding such lack of creditors
21   and the nondisclosure of business creditors was not a disputed or
22   undisputed fact in the joint pretrial order.
23        5. Whether the bankruptcy court improperly considered
24   payments the Debtor made within the two-year period prior to
25   filing of the petition to attorneys unrelated to bankruptcy law
26   or debt relief in finding that the Debtor made a false oath.
27        6. Whether in finding that the Debtor made a false oath the
28   bankruptcy court improperly relied upon the Debtor’s

                                    -9-
 1   nondisclosure on Schedule G of an executory contract with his ex-
 2   wife, Sang Song, which formed the basis of a disallowed claim.
 3                         III. STANDARD OF REVIEW
 4        We review the bankruptcy court’s factual findings for clear
 5   error, the selection of the applicable legal rules under § 727 de
 6   novo, and the application of the facts to those rules de novo.
 7   Searles v. Riley (In re Searles), 317 B.R. 368, 373 (9th Cir. BAP
 8   2004).   A court’s factual finding is clearly erroneous if it is
 9   illogical, implausible, or without support in the record. United
10   States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en
11   banc).
12                            IV. JURISDICTION
13        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
14   §§ 157(b)(2)(J) and 1334(a).   The Panel has jurisdiction pursuant
15   to 28 U.S.C. §§ 158(a)(1) and (c)(1).
16                              V. DISCUSSION
17        The party objecting to discharge “bears the burden of
18   proving by a preponderance of the evidence that [a debtor's]
19   discharge should be denied.” Khalil v. Developers Sur. & Indem.
20   Co. (In re Khalil), 379 B.R. 163, 172 (9th Cir. BAP 2007), aff’d,
21   578 F.3d 1167, 1168 (9th Cir. 2009) (expressly adopting the BAP’s
22   statement of the law).   “In keeping with the ‘fresh start’
23   purposes behind the Bankruptcy Code, courts should construe § 727
24   liberally in favor of debtors and strictly against parties
25   objecting to discharge.” Retz v. Samson (In re Retz), 606 F.3d
26   1189, 1196 (9th Cir. 2010) (quoting Bernard v. Sheaffer (In re
27   Bernard), 96 F.3d 1279, 1281 (9th Cir. 1996)).   This requires
28   that the objecting party show actual intent, not constructive

                                    -10-
 1   intent. Retz, 606 F.3d at 1196 (quoting Khalil, 379 B.R. at 172).
 2          The Debtor’s right to a discharge is tempered by the
 3   provisions of § 727(a).    One ground for denying the debtor a
 4   discharge is where the debtor knowingly and fraudulently, in or
 5   in connection with the case, made a false oath or account.
 6   § 727(a)(4)(A).    “The fundamental purpose of § 727(a)(4)(A) is to
 7   insure that the trustee and creditors have accurate information
 8   without having to conduct costly investigations.” Retz, 606 F.3d
 9   at 1196 (quoting Khalil, 379 B.R. at 172).    A false oath in the
10   case may include a debtor’s false statement or omission in the
11   schedules or statement of financial affairs. Khalil, 379 B.R. at
12   172.
13          “To prevail on this claim, a plaintiff must show, by a
14   preponderance of the evidence, that: (1) the debtor made a false
15   oath in connection with the case; (2) the oath related to a
16   material fact; (3) the oath was made knowingly; and (4) the oath
17   was made fraudulently.” Retz, 606 F.3d at 1197 (internal
18   quotation marks omitted) (quoting Roberts v. Erhard (In re
19   Roberts), 331 B.R. 876, 882 (9th Cir. BAP 2005)).    “A fact is
20   material if it bears a relationship to the debtor’s business
21   transactions or estate, or concerns the discovery of assets,
22   business dealings, or the existence and disposition of the
23   debtor’s property.” Retz, 606 F.3d at 1198 (internal quotation
24   marks omitted) (quoting Khalil, 379 B.R. at 173).    The
25   misstatement or omission may be material even though it does not
26   cause direct financial prejudice to creditors. Fogal Legwear of
27   Switz., Inc. v. Wills (In re Wills), 243 B.R. 58, 63 (9th Cir.
28   BAP 1999).    False or incomplete information is material if it

                                     -11-
 1   affects the administration of the estate, including the discovery
 2   of past transactions by the debtor. Id.
 3        “A debtor acts knowingly if he or she acts deliberately and
 4   consciously.” Retz, 606 F.3d at 1198 (internal quotation marks
 5   omitted) (quoting Khalil, 379 B.R. at 173).   To show fraudulent
 6   intent, a party must show:
 7        1.   that the debtor made the representations;
 8        2.   that at the time the representations were made, the
 9             debtor knew they were false; and
10        3.   that the debtor made them with the intention and
11             purpose of deceiving creditors.
12   Khalil, 379 B.R. at 173 (quoting Roberts, 331 B.R. at 884).
13   Intent is typically proven though circumstantial evidence or by
14   inferences drawn from a debtor’s conduct. Retz, 606 F.3d at 1199.
15   “Reckless indifference or disregard for the truth may be
16   circumstantial evidence of intent, but is not sufficient, alone,
17   to constitute fraudulent intent.” Id.
18        However, such recklessness is probative of the debtor having
19   fraudulent intent.   When coupled with other factors, a pattern of
20   multiple omissions of material assets or information may support
21   the court drawing the inference of fraud by the debtor. Garcia v.
22   Coombs (In re Coombs), 193 B.R. 557, 565 (Bankr. S.D. Cal. 1996).
23   This standard echos the long-standing legal maxim: acta exteriora
24   indicant interiora secreta.4   Other factors include when the
25   nature of the assets or information suggests that the debtor was
26   aware of them when the schedules were prepared and there was
27
          4
              “Outward acts indicate the thoughts hidden within.”
28
     BLACK’S LAW DICTIONARY 1816 (Dlx. 9th ed. 2009).

                                    -12-
 1   something about the assets or information which the debtor might
 2   want to conceal. Id.
 3   A. The Bankruptcy Court’s Decision Is Supported by its
 4   Unchallenged Factual Conclusions
 5        As correctly argued by Plaintiffs, the Debtor has
 6   selectively challenged the findings of the bankruptcy court.     No
 7   appeal has been taken from the bankruptcy court’s first, second,
 8   third, fifth, seventh, and eleventh findings.   Any objections to
 9   these findings are waived. Butler v. Curry, 528 F.3d 624, 641
10   (9th Cir. 2008).   The unchallenged findings of the bankruptcy
11   court are that:
12        First, the Debtor intentionally did not disclose in the
13   Statements of Financial Affairs material information.    The first
14   is the transfer of $10,000 to his ex-wife shortly before the
15   commencement of the bankruptcy case in response to Question 10.
16        Second, the Debtor intentionally did not disclose the
17   withdrawal of $9,000 cash from his sole-proprietorship medical
18   practice bank account to pay his daughter.   Further, the Debtor
19   also did not disclose the payments which he subsequently
20   testified were made by him to Betty Song in 2007 and 2008.
21        Third, to the extent that the Debtor asserts that the
22   $10,000 payment to Sang Song, his ex-wife, was in consideration
23   of a debt, the Debtor did not disclose the payment in response to
24   Question 3.
25        Fourth, the Debtor did not disclose discontinuing the use of
26   his business checking account one month before the bankruptcy
27   case was filed, and transferring monies into and out of a bank
28   account belonging to his ex-wife, Sang Song, for the operation of

                                    -13-
 1   his business.
 2        Fifth, the original Schedule J did not accurately state the
 3   Debtor’s expenses.    While the Debtor’s actual monthly expenses
 4   for room, board, and other living expenses were a lump-sum of
 5   $3,000 he paid to his ex-wife, Schedule J stated greater itemized
 6   expenses which could not be supported.
 7        Sixth, the Debtor misstated that he was due a tax refund of
 8   $27,000, when in the Fall of 2009 he subsequently testified that
 9   the actual refund he expected was $5,000.
10        Given these factual conclusions by the bankruptcy court, we
11   must first consider if, assuming that the Debtor is correct in
12   his contention that the bankruptcy court erred in other findings
13   and conclusions, the bankruptcy court’s purported errors would
14   have any affect on the outcome.    We conclude that the
15   unchallenged findings support the bankruptcy court’s judgment
16   denying the Debtor his discharge.
17        The Debtor’s decision not to disclose (1) the $10,000
18   transfer to his ex-wife, (2) the $9,000 payment to his daughter,
19   and (3) the use of his ex-wife’s bank account for the operation
20   of his business, together with the inaccurate reporting of his
21   monthly living expenses on Schedule J and misstatement of his
22   expected tax refund, support the bankruptcy court’s conclusion
23   that, by a preponderance of the evidence, he made a false oath
24   regarding material facts with knowing, fraudulent intent.
25        These uncontested factual conclusions standing alone show a
26   pattern of multiple omissions supporting the bankruptcy court’s
27   inference of fraud.    The Debtor’s reckless disregard of the
28   truth, coupled with the Debtor’s obvious motive to favor his

                                     -14-
 1   family and ex-wife, as well as to hide income, assets, and
 2   transfers from his known creditors, satisfactorily establishes
 3   the knowing intent of the Debtor to misstate the information in
 4   the schedules and statement of financial affairs.
 5          The Debtor was properly denied his discharge pursuant to
 6   § 727(a)(4).    Therefore, all of the errors by the bankruptcy
 7   court alleged by this appeal were harmless. See Yadidi v.
 8   Herzlich (In re Yadidi), 274 B.R. 843, 853 (9th Cir. BAP 2002)
 9   (citing Helvering v. Gowran, 302 U.S. 238, 245 (1937) (“In the
10   review of judicial proceedings the rule is settled that if the
11   decision of the court below is correct, it must be affirmed,
12   although the lower court relied upon a wrong ground or gave a
13   wrong reason.”)).    The decision of the bankruptcy court is
14   affirmed based on the unchallenged findings of fact and
15   conclusions of law.
16          Nonetheless, the Panel will also address errors the Debtor
17   alleges were made by the bankruptcy court.
18   B. The Bankruptcy Court Did Not Consider Post-petition
19   Disallowance of Claims in Finding That the Debtor Made a False
20   Oath
21          First, the Debtor contends that the bankruptcy court
22   improperly used a post-petition decision regarding claims held by
23   his close relatives — his ex-wife Sang Song and daughter Betty
24   Song — to make its finding that he made a false oath.    The only
25   basis for finding that the family debts were mischaracterized or
26   misstated, according to the Debtor, is the disallowance of their
27   claims in the bankruptcy case.    The Debtor argues that the only
28   evidence adduced at trial on this issue was that he believed that

                                      -15-
 1   he owed his ex-wife and daughter money.
 2        The Debtor’s argument is unpersuasive.   In the first
 3   instance, he did not provide the Panel with an adequate record to
 4   review.   While attempting to cast this issue as a question of law
 5   — whether the bankruptcy court’s consideration of post-petition
 6   disallowance of claims was proper — this is actually a question
 7   centered on the sufficiency of the evidence before the bankruptcy
 8   court and its factual finding, a determination reviewed for clear
 9   error.    Therefore, the Debtor should have provided the Panel with
10   a full transcript, not some 30 pages of excerpts for a four-day
11   trial. See 9th Cir. BAP Rule 8006-1.   The lack of an adequate
12   record to support the contention that the Debtor’s belief
13   regarding the debts was the only evidence offered at trial is
14   cause to affirm. See In re Friedman, 126 B.R. 63, 68 (9th Cir.
15   BAP 1991) (failure to provide an adequate record may be grounds
16   to affirm).
17        Moreover, as Appellees argue, the bankruptcy judge did not
18   rely upon the disallowance of the claims to conclude that the
19   Debtor mischaracterized or misstated the debts owed to Sang Song
20   and Betty Song.   Rather, the bankruptcy court relied upon the
21   Debtor’s own testimony at trial where he testified that he paid
22   Sang Song $2,500 - $3,500 per month for living expenses,5 not a
23   personal loan identified on Schedule F.   Further, while the
24   Debtor scheduled his debt to Betty Song as $20,000, he admitted
25
          5
26           The Debtor testified, “Well, we signed, we agreed, if I
     have money, I’m going to pay her minimum $2,500 per month. That
27   include [sic] rent, and then boarding, and other — like the
     utilities, anything — the house maintenance.” Trial Tr. 144:14-
28
     17.

                                     -16-
 1   that he never really knew how much Betty Song charged him for
 2   services though May 1, 2008.6    There was sufficient evidence
 3   before the bankruptcy court for its determination that the Debtor
 4   mischaracterized or misstated the debts owed to Sang and Betty.
 5   This determination was made not on reliance of the allowance or
 6   disallowance of a claim, but rather based on the Debtor’s own
 7   testimony at trial.
 8   C. The Debtor’s Decision to Not Disclose the Social Security
 9
10        6
              The testimony at trial was:
11
          Q       As you sit here today, do you have any dollar amount in
12                mind as to what Betty charged to prepare and file those
                  three civil lawsuits?
13
14        . . .

15        A       I cannot even estimate, but I believe she charged me
                  $200 per hour, and then maybe like filing fees, and
16                maybe there might be extra fees because I think it’s
                  beyond just a charging how many hours. But – so
17
                  whatever normal regular type fees, filing, something
18                like that.

19        . . .
20        Q       Doctor Song, at any time when Betty was performing
                  legal services for you from 2004 until May 1st of 2008,
21
                  did you ever ask her, “how much will this cost me?”
22
          A       Not any specific amount. But I wanted to know, then she
23                said, well I have my own handwritten record. Then I
                  didn’t really pursue how much. But when she mentioned,
24                like for ‘04, say $7,000, if I had money I’d pay her
25                $7,000.

26                But if I wanted I can really ask her, like a regular
                  private practice, the invoices, but I wasn’t really
27                interested in that.
28
     Trial Tr. 53:18-55:7.

                                      -17-
 1   Benefits Was Material
 2        The Debtor next contends that the nondisclosure his $1,980
 3   monthly Social Security benefit was not material because the
 4   claims against him were for primarily nonconsumer debts, he only
 5   began receiving the benefit in September 2007, and the benefit is
 6   exempt.   The Panel reviews this question of law de novo.
 7        Social Security benefits must be disclosed on Schedule I.
 8   Keith M. Lundin & William H. Brown, Chapter 13 Bankruptcy, 4th
 9   Edition, § 35.10, at ¶ 8, Sec. Rev. May 12, 2009, (discussing a
10   debtor’s obligation of full disclosure).    The fact that the
11   Debtor filed for bankruptcy protection under Chapter 7 did not
12   relieve him of this obligation.    As the bankruptcy estate
13   includes all legal or equitable interest of a debtor on
14   commencement of the case, inclusion of Social Security benefits
15   is proper even when those benefits may be exempted. Looney v.
16   Feldman (In re Feldman), 242 B.R. 88, 93 (Bankr. S.D. Fla. 1999).
17   While the Feldman court concluded that not disclosing Social
18   Security beneifts was immaterial because of the exempt nature of
19   the benefits, at least one other court found that not disclosing
20   Social Security income for two years was material. Chambers v.
21   Coon (In re Coon), No. 6:07-ap-00048-AAB, 2008 Bankr. LEXIS 3561,
22   at *14-*15 (Bankr. M.D. Fla. 2008).    Still other courts have
23   found that not disclosing fully exemptible assets or assets that
24   will not be disbursed to creditors through the bankruptcy estate
25   is material. See Coombs, 193 B.R. at 566 (401(k) plan); Mertz v.
26   Rott (In re Mertz), 955 F.2d 596, 598-99 (8th Cir. 1992) (fully-
27   exempt state income tax refund).
28        In fact, the disclosure of the benefits ten months after

                                    -18-
 1   filing of the petition accounted for 68.5% of the swing in the
 2   Debtor’s monthly net income ($1,980 of $2,890) as reported on the
 3   amended Schedule J.   While the benefits are exempt in the Chapter
 4   7 proceeding, disclosure of the benefits is required to afford
 5   creditors and the trustee accurate information about a debtor’s
 6   financial position without having to conduct costly
 7   investigation. See Retz, 606 F.3d at 1196.
 8        The Debtor’s argument that the trustee and creditors could
 9   have determined the possible existence of additional wealth
10   hidden from view through a review of his schedules is
11   unpersuasive.   This argument is premised on the fact that the
12   bank account holding the accumulated Social Security benefits was
13   disclosed on Schedule B.7   However, neither the schedules nor the
14   original or amended Statements of Financial Affairs disclosed the
15   source of these funds and Schedule C, which apparently was never
16   amended, claims the funds exempt pursuant to California Code of
17   Civil Procedure § 703.140(b)(5) (the “wildcard” exemption).    From
18   this record, it is unclear to us how the trustee and creditors
19   were to divine the existence of the Debtor’s Social Security
20   benefit since the source of the funds in the personal savings
21   account was not disclosed, the funds were not marked as not
22   property of the estate, nor was the fact that the Debtor was even
23   receiving Social Security benefits disclosed.
24        Not disclosing the Social Security benefits, even in this
25
26
          7
             Presumably the Debtor refers to the “Citibank Individual
27   Savings - Account Number 1997” which had a balance of $16,600 on
     the petition date, the only personal bank account disclosed on
28
     Schedule B.

                                    -19-
 1   nonconsumer case, denied the trustee and creditors the full
 2   financial picture to which they were entitled.    If the trustee,
 3   creditors, and other parties in interest could be expected to
 4   believe the schedules, the Debtor was losing $2,580 every month.
 5   In fact, the Debtor’s amended schedules state that he had monthly
 6   net income of $310.    The bankruptcy court properly found this
 7   omission to be material.
 8   D. The Bankruptcy Court’s Characterization of the Debtor’s
 9   Misstatements of Fact in the Schedules and Statements as “Wild
10   Guesses” is Supported by the Evidence
11          Next, the Debtor challenges the bankruptcy court’s factual
12   finding that his misstatements and mischaracterizations of his
13   debts, income, and expenses represented “wild guesses.”     This
14   factual finding is reviewed for clear error. Searles, 317 B.R. at
15   373.
16          Again, the Panel notes that this issue may be summarily
17   rejected as the Debtor did not provide an adequate record.     For
18   the Panel to properly review the challenged factual finding, the
19   Debtor should have provided the Panel with a full transcript, not
20   some 30 pages of excerpts for a four-day trial.    Only with the
21   complete record could the Panel review the sufficiency of the
22   evidence before the bankruptcy court to support its factual
23   finding.    The Debtor did not provide an adequate record
24   supporting his contention that insufficient evidence underpins
25   the bankruptcy court’s finding that the misstatements and
26   mischaracterizations were “wild guesses,” which is cause to
27   affirm. 9th Cir. BAP Rule 8006-1; Friedman, 126 B.R. at 68.
28   However, even looking at the record provided, the Panel cannot

                                     -20-
 1   find that the bankruptcy court committed clear error.
 2        The Debtor argues that even if some of the items in his
 3   schedules and statements were not accurate, this does not qualify
 4   them as “wild guesses.”   The only place in the record before the
 5   Panel where the Debtor utters the phrase “wild guess” is when he
 6   answered questions relating to exemptions in a state-court levy
 7   proceeding.   The phrase “wild guesses” appears only four times in
 8   the bankruptcy judge’s opinion.8   The bankruptcy judge’s opinion
 9   does indicate at two places that the Debtor stated that his
10   initial disclosures or schedules were “wild guesses.”   This
11   attribution is unsupported by the record before us and the issue
12   was conceded by Plaintiffs at oral argument.
13        However, the misattribution does not undermine the actual
14
15
          8
              The appearances are as follows:
16
     “Debtor’s explanation that these inaccuracies were pure
17
     negligence or oversight falls woefully short, especially coming
18   from a person who said under oath that his initial disclosures of
     financial information were ‘wild guesses.’” Mem. of Decision on
19   Obj. to Discharge (“Mem. Dec’n”) 4:24-5:1.
20   “Perhaps this itemization was part of what Dr. Song was referring
     to when he said his initial schedules were ‘wild guesses.’” Id.
21
     at 18:5-6.
22
     “The sums owed to Betty were apparently more of Dr. Song’s ‘wild
23   guesses’ because his testimony was first that he did not expect
     to pay her, then that he expected to pay her but she never
24   presented him with a billing until after the bankruptcy petition
25   was filed.” Id. at 18:11-14.

26   “Dr. Song’s failure to provide full disclosure of his assets,
     income and transactions prior to bankruptcy was not an accident
27   and he made no attempt to correct his initial ‘wild guesses’
     until he had had plenty of time to understand the potential
28
     consequences of the initial falsity.” Id. at 19:23-20:1.

                                    -21-
 1   factual finding that the Debtor’s “initial Schedule J was a total
 2   misstatement of the Debtor’s expenses, not reflecting his
 3   accurate monthly lump sum payment to Sang Song for room and board
 4   and other living expense, but instead itemizing [fictional]
 5   expenses . . . .”   Mem. Dec’n 18:3-5.
 6        To the extent that the bankruptcy judge may have incorrectly
 7   cited the source of the “wild guesses” phrase, this does not
 8   undercut her finding that expenses on the initial Schedule J were
 9   fiction.   Nor was it improper for the bankruptcy judge to use the
10   Debtor’s own words — though lifted from a slightly different
11   context — to describe his conduct in the bankruptcy case.    Judges
12   have many different literary techniques at their disposal and the
13   effective use of these techniques should not be unnecessarily
14   frustrated. See, e.g., In re Judicial Misconduct, 632 F.3d 1289,
15   2011 U.S. App. LEXIS 2108, at *2-*3 (9th Cir. Jud. Council 2011)
16   (discussing the use of humor as an effective literary tool which
17   does not violate Code of Conduct for United States Judges).
18        The bankruptcy court’s underlying factual finding — that the
19   initial schedules were inaccurate — is supported by the evidence
20   and the bankruptcy court’s decision is not clearly erroneous.
21   The fact that the bankruptcy court elected to use the Debtor’s
22   own words to emphasize that he did not base his disclosures in
23   the schedules and statement of financial affairs on the accurate
24   information available to him does not render bankruptcy judge’s
25   decision reversible.
26   E. The Bankruptcy Court Properly Considered the Absence of
27   Business Creditors on Debtor’s Schedule F
28        The 32-page joint pretrial order in this adversary

                                    -22-
 1   proceeding did not, according to the Debtor, create a basis for
 2   the bankruptcy court to conclude that he did not list business
 3   creditors on Schedule F.   Because this was not a disputed or
 4   undisputed fact, the Debtor concludes that the bankruptcy court
 5   improperly considered this factor in determining that he made a
 6   false oath.   Appellants concede the issue in their briefs, but
 7   argue that the error was harmless.    The Panel reviews this issue
 8   of law de novo and concludes that both parties are incorrect.
 9        It is undisputed that the original and amended schedules
10   were admitted into evidence at trial.   As the bankruptcy court
11   observed, neither of the Schedules F included any business
12   creditors other than Appellees.   On this point, the bankruptcy
13   court said, “Dr. Song was not a corporation and on any given date
14   he clearly had business obligations which were unpaid, including
15   the petition date.” Mem. Dec’n 18:15-17.   Though unstated, it is
16   apparent that the bankruptcy court took judicial notice, pursuant
17   to Federal Rule of Evidence 201(b)-(c), of the fact that ongoing
18   businesses have obligations that remain unpaid at any given point
19   in time.   That this issue was not listed in the joint pretrial
20   statement is not fatal to the decision. See Fed. R. Civ. P.
21   15(b)(2) incorporated by Fed. R. Bankr. P. 7015.
22        The Panel does note that bankruptcy court’s findings do not
23   include any statement that such creditors existed.   Though the
24   absence of such business expenses is contrary to common
25   experience, the Panel gives this finding minimal weight in
26   affirming the bankruptcy court.   The other misstatements and
27   omissions are sufficient to sustain the judgment.
28

                                    -23-
 1   F. The Bankruptcy Court’s Consideration of Undisclosed Payments
 2   to Attorneys for Services Unrelated to Bankruptcy Law or Debt
 3   Relief was Proper
 4        The Debtor also attacks the bankruptcy court’s finding that
 5   he committed a false oath when he did not disclose payments to
 6   attorneys for services unrelated to debt relief or his
 7   bankruptcy.   Because the services were not related to debt relief
 8   or his bankruptcy, he contends that disclosure was not required
 9   by Question 9 on the statement of financial affairs.
10        However, the bankruptcy court’s opinion notes that in
11   responding to Question 10 on the statement of financial affairs
12   the Debtor did not disclose payments during the two-year period
13   prior to filing of the petition.   Unlike Question 9, which asks
14   about transfers during the one-year period prior to filing,
15   Question 10 of the statement of financial affairs requires
16   disclosure of transfers not made during the ordinary course of
17   business during the prior two-year period.
18        The Debtor rejoins that he “likely did not consider payment
19   of attorneys[’] fees as billed as transfers [outside] the
20   ordinary course of business or financial affairs that should be
21   disclosed in Question Number 10 . . . .”   Aplt. Op. Br. p. 16
22   (emphasis added).   This is an interesting choice of words by the
23   Debtor and undercuts his contention that an accurate disclosure
24   of these payments is not required or material.   Merely contending
25   a hypothetical belief by the Debtor and not directing the
26   bankruptcy court, and now the Panel, to actual evidence of what
27   the Debtor actually intended to do will not carry the day.
28        The Debtor also argues that since there is no clear place on

                                    -24-
 1   the statement of financial affairs to disclose the payment of
 2   attorneys’ fees, his nondisclosure is a reasonable omission which
 3   should not serve as a basis for a finding of a false oath.     This
 4   argument is unconvincing.    The Debtor has a duty to prepare the
 5   petition, statements, and schedules carefully, completely, and
 6   accurately. Cf. Cusano v. Klein, 264 F.3d 936, 945-946 (9th Cir.
 7   2001) (holding that a debtor has a duty to prepare schedules
 8   carefully, completely, and accurately) (quoting In re Mohrig, 142
 9   B.R. 389, 394 (Bankr. E.D. Cal. 1992)).    To allow a debtor to
10   ignore this duty because he or she believes there is “no clear
11   place” for the disclosure would render this basic obligation of a
12   debtor a nullity, turning the bankruptcy process on its head.
13   Schedules and statements of financial affairs are sworn
14   statements, signed by debtors under penalty of perjury.
15   “Adopting a cavalier attitude toward the accuracy of the
16   schedules and expecting the court and creditors to ferret out the
17   truth is not acceptable conduct by debtors or their counsel.”
18   AT&T Universal Card Servs. Corp. v. Duplante (In re Duplante),
19   215 B.R. 444, 447 (9th Cir. BAP 1997).    This Debtor was
20   represented by counsel throughout the entire bankruptcy case.     He
21   did not have to “guess” as to what information is required — he
22   was advised by knowledgeable bankruptcy counsel every step of the
23   way.    For whatever reason, he decided to omit this information.
24          Moreover, the Debtor had a clear duty to disclose the
25   payments in response to Questions 3 and 10 on the statement of
26   financial affairs.    The evidence at trial demonstrated that the
27   Debtor was a medical doctor involved in extensive litigation
28   during the two years prior to the filing of the petition.      Though

                                     -25-
 1   the Debtor suggests that whatever payments he made to attorneys
 2   were in the ordinary course of business, at least those payments
 3   made to a criminal-defense attorney could not have been in the
 4   ordinary course of business.    Further, the Debtor was embroiled
 5   in the litigation which resulted in the two judgments against him
 6   that were being aggressively enforced and resulted in the filing
 7   of this bankruptcy case.    As the Debtor did not meet his duty in
 8   responding to Question 10, the bankruptcy court’s determination
 9   was proper.9
10   G. The Bankruptcy Court Incorrectly Relied on the Debtor’s
11   Purported Nondisclosure of Executory Contract with His Ex-Wife on
12   Schedule G
13        Finally, the Debtor argues that the bankruptcy court
14   improperly concluded that Schedule G did not disclose an
15   executory contract under which the Debtor was making payments of
16   $2,500 to $3,500 a month to Sang Song.    The Debtor contends that
17   this is improper because the bankruptcy court subsequently
18   determined that Sang Song did not have a claim in the case and,
19   therefore, there was no executory contract for him to list on
20   Schedule G.    This presents a question of law which the Panel
21
22
          9
             This also raises an issue as to what payments should also
23   have been disclosed in response to Question 3(b), payments made
     to any creditor which exceeds $5,475 to any one creditor within
24   ninety days of the commencement of the bankruptcy case or any
25   payments made within one year to an insider. The Debtor’s
     Original and Amended Schedule J lists business expenses of
26   $19,152 per month. This includes $7,277 for payroll, $3,809 for
     rent, and $3,619 for professional fees. None of these are listed
27   in response to Question 3(b), though clearly the rent (and most
     likely some payments to employees and professionals) exceed
28
     $5,475 in the ninety-day period prior to the bankruptcy filing.

                                     -26-
 1   reviews de novo.
 2        The bankruptcy court determined that the Debtor did not list
 3   the executory contract which was presented in Exhibit 247 at
 4   trial.    Exhibit 247 is Sang Song’s limited opposition to an
 5   objection to her proof of claim for priority spousal support
 6   debt.    The exhibit includes the declarations of Sang Song and the
 7   Debtor, as well as the Exhibit A described in the bankruptcy
 8   court’s decision.    Exhibit A is a one-page, handwritten document
 9   purportedly signed by Sang Song and the Debtor.    The terms of
10   this agreement state that when the Debtor needs financial
11   assistance to operate his medical practice, Sang Song agrees to
12   help him in unstated amounts, if she has enough money, and the
13   Debtor agrees to repay her, on unstated terms, when he is able to
14   do so.    Further, they agree that the Debtor will pay Sang Song
15   $2,500 to $3,000 a month, when the Debtor is able to do so.
16   Finally, the Debtor agrees to provide undefined help to Sang
17   Song, who is stated to have rheumatoid arthritis and chronic
18   bronchiectasis, when she needs medical help and has problems with
19   daily activities.    Exhibit B to the opposition included in Trial
20   Exhibit 247, which Sang Song identifies as a handwritten ledger
21   of payments from the Debtor, states that the $2,500 to $3,000 a
22   month is for living expenses, and that if the Debtor does not
23   have enough money to pay the living expenses, they can be paid
24   later (on unstated terms and at an unstated time) as a loan.
25        The decision of the bankruptcy court does not include the
26   basis for the determination that the Debtor knew or should have
27   known that he had an executory contract to be listed on
28   Schedule G, rather than listing Sang Song as a creditor on

                                     -27-
 1   Schedule F.    Neither of the parties address this issue, but
 2   assume that there was an executory contract, with the Debtor
 3   contending that since the claim of Sang Song was denied there
 4   could not be misstatement under oath.
 5        The analysis of this issue begins with § 365, which provides
 6   for the treatment of executory contracts and leases, but does not
 7   provide for a definition of either.     The case law has adopted
 8   what is commonly referred to as the “Countryman Definition” that:
 9        a contract is executory if “the obligations of both
          parties are so unperformed that the failure of either
10        party to complete the performance would constitute a
          material breach and thus excuse the performance of the
11        other.”
12   Unsecured Creditors’ Comm. v. Southmark Corp. (In re Robert L.
13   Helms Constr. & Dev. Co.), 139 F.3d 702, 705 (9th Cir. 1998)
14   (citation omitted) (“Helms”).     The contract will not be
15   considered executory if performance does not remain due on both
16   sides to some extent.     In Helms the Ninth Circuit concluded that
17   an option to purchase property which was not exercised prior to
18   the commencement of the bankruptcy case was not an executory
19   contract because the duties between the parties remained too
20   speculative.    Id.   For the purposes of federal law, it is well
21   established that a contract is executory if the failure of one
22   party to perform would constitute a material breach under
23   applicable state law.     In re Rega Properties, Ltd., 894 F.2d
24   1136, 1139 (9th Cir. 1990) (quoting Hall v. Perry (In re Cochise
25   College Park, Inc.), 703 F.2d 1339, 1348 n.4 (9th Cir. 1983)).
26        Though the conduct of the Debtor in this case may well have
27   been grounds for the bankruptcy court to question the veracity of
28   his statements and the true intentions of listing Sang Song on

                                      -28-
 1   Schedule F, the Panel cannot conclude that there was an alleged
 2   executory contract sufficient that the failure to include Sang
 3   Song on Schedule G constitutes a violation of § 727(a)(4)(A).
 4        Both parties must have an obligation to perform for the
 5   contract to be executory.    Helms, 139 F.3d at 706.   The contract
 6   is not an executory contract for purposes of the Bankruptcy Code
 7   if the continuing duties between the parties are too speculative.
 8   Performance due in the future only at the discretion of one party
 9   is not sufficient. Id.
10        For the obligation owed to Sang Song, neither the record nor
11   the bankruptcy court’s decision establish what obligations either
12   the Debtor or Sang Song were required to perform in the future.
13   The Debtor was not required to continue to live in Sang Song’s
14   home or to pay any amounts at a specific time.     The Debtor could
15   pay when he thought he had enough money.     Sang Song was not
16   committed to allow the Debtor to live at her house and for her to
17   provide the Debtor with other living necessities for any
18   specified period in the future.    Both could just walk away from
19   their understanding.
20        The record does not establish that there was so clearly an
21   executory contract to warrant finding that the Debtor made a
22   false oath by not listing it on Schedule G.     Nevertheless, this
23   error is harmless as the weight of the other factual findings
24   support the bankruptcy court’s conclusion. See Yadidi, 274 B.R.
25   at 853.
26                               VI. CONCLUSION
27        In addition to the unchallenged material nondisclosures and
28   inaccurate disclosures which are sufficient, in and among

                                      -29-
 1   themselves, to affirm the bankruptcy court ruling, the Panel
 2   determines that all but one of the challenged findings are
 3   supported by the record.   For the one finding which is not
 4   supported by the record, the error is harmless.
 5        We conclude that bankruptcy court correctly applied the
 6   provisions of § 727(a)(4)(A) and its decision determining that
 7   the Debtor knowingly and fraudulently made false statements under
 8   oath in his schedules and statements of financial affairs is not
 9   clearly erroneous.
10        The decision of the bankruptcy court is AFFIRMED.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

                                    -30-
