Recently on our bankruptcy forum a user asked, “I was injured in a severe car accident. The driver was intoxicated. I will never walk again. I just found out that the driver is filing bankruptcy. I am concerned about my DUI injury judgment. Can this be discharged in Chapter 7 bankruptcy? I filed a DUI injury claim against the driver because they did not have insurance to cover the expense of my injuries.”
Chapter 7 bankruptcy and the discharge
Although it’s more difficult to file Chapter 7 than it was years ago, each year thousands of debtors are still able to use this legal process to avoid paying certain creditors. And as you suspected, Chapter 7 bankruptcy can be used to discharge certain types of unsecured debt.
Bankruptcy law does, however, forbid the discharge of certain types of debts, both secured and unsecured. For example, public policy and the good of society dictates that child support payments and spousal support must be paid. Bankruptcy laws also protect the following debts:
- Debt that was obtained through fraud, embezzlement, or under false pretenses.
- Certain property taxes
- Student loans (exemptions apply)
- Post-petition HOA fees
- Taxes withheld from employee wages
- Debts determined nondischargeable in a previous bankruptcy
- Some condominium dues and fees
- Pension or retirement loans
- Debts for willful and malicious injury
- Debts from personal injury claims for DUI
DUI injury judgment are not dischargeable
Now, you asked about a personal injury judgment for injuries and expense from a DUI car accident. There is good news for you. Bankruptcy laws also forbid the discharge of certain debts that the government has deemed as debt resulting from “bad actions.”
Not only will the DUI injury judgment be nondischargeable, but other criminal DUI fines and penalties issued by the court, including the restitution, which the courts have ruled is a governmental penalty and is considered a “rehabilitative part of a criminal conviction” must also be paid.
What steps do I need to take to protect my DUI injury judgment?
Now, protections are often provided but may not be automatic. In your particular case, however, the DUI injury debt will be automatically not dischargeable. In fact, the Chapter 7 bankruptcy code (11 U.S.C. §523(a)(9)) has been specifically amended to eliminate any discharge of a DUI injury settlement caused by the debtor’s operation of a motorized vehicle.
In other cases, however, the creditor would have to file an objection by filing an adversary proceeding and proving the debt should not be discharged.
If you have been injured in a DUI accident and won a DUI injury judgment this debt cannot be discharged by the defendant in your DUI case. Unfortunately, however, if someone is in a financial crisis and has to file bankruptcy they may not have the ability to pay the debt owed.
There are, however, legal means to enforce a DUI injury judgment. The bad news is that after your personal injury claim is settled you may have to take additional steps to get paid. For example, you may have to file a wage garnishment (if allowed in your state), request a lien on their nonexempt property, request a bank account levy, or review what other assets can be repossessed and sold.
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