Unfortunately, disaster has a way of happening when we least expect it. This is something that bankruptcy attorneys know all too well. After all, people rarely make an appointment to talk to these lawyers when their lives are going well. Instead, clients enter their offices when something has gone horribly wrong, oftentimes quite unexpectedly – for instance, a car accident. If you find yourself in this scenario, relax you now have an option available to you to help discharge the debt.
How Bankruptcy Deals with Property Damages from Car Accidents
According to the law you as a debtor can discharge debts for any damage that resulted from a vehicular accident. The only exception to this is Section 523(a)(6) which says that you cannot discharge property damages that you’ve willfully and maliciously caused to another person or their property. This is something that was demonstrated by the U.S. Supreme Court in the Kawaauhau v. Geiger matter, 523 U.S. 57, 61–62 (1998) whereby willful and malicious acts were differentiated from negligent and reckless acts.
According to this case willful injuries are those that are deliberately or intentionally done. Typically, this means that an auto accident will fall outside of this scope. Even if you’re caught driving drunk, you’re usually charged with actions of “reckless disregard” and not ones that are “willful and malicious.” The only exception to this occurs in a car accident Chapter 7 case. If you file a Chapter 13 case though, there isn’t a property damage exception. This means that any damage that resulted from your vehicular accident will automatically be discharged in a Chapter 13 case.
How Bankruptcy Deals with Personal Injury Debt from Car Accidents
Unfortunately, when it comes to personal injuries the bankruptcy code is less forgiving. There are in fact a lot of restrictions related to discharging such debts. Section 523(a)(9) contains the most restrictive of these exceptions. It has to do with driving while you’re under the influence of alcohol and it doesn’t matter if you file a Chapter 7 or a Chapter 13 case, it still applies to you.
It is quite possible for the court to find that your judgment satisfies all the necessary elements to meet an exception according to Section 523(a)(9) but it still isn’t bound by an acquittal in a state DUI case. This is because the standard of proof is different for criminal proceedings in the state court. A bankruptcy may also discover that under Section 523(a)(9) personal injuries can’t be discharged even if you aren’t charged with or you’re acquitted of a criminal DUI offense.
For more information on how all of this works and what your rights are concerning your car accident if you were to file a Chapter 7 or a Chapter 13 case, contact the Rojas Law Group today. Over the years Attorney Rojas has helped many people successfully navigate their way through these grey areas of the law. Make sure to give her a call today and set up an appointment so she can help you too.
Picture Credit: Matthew T Rader