Recently on our legal forum a user asked, “I was arrested in 2015 and charged with driving under the influence (DUI). I injured the other driver severely. We live in Texas, and the driver filed a personal injury claim and sued me. I lost the case and now have to pay a DUI injury settlement worth $20,000. I am wondering if I have the legal right to discharge the personal injury settlement by filing a Chapter 7 bankruptcy?”
Chapter 7 bankruptcy overview
Chapter 7 bankruptcy is called a liquidation bankruptcy because it allows a court-appointed bankruptcy trustee to be appointed to your case, gather your nonexempt assets, and liquidate them to repay your qualifying creditors.
Although Chapter 7 bankruptcy discharges most types of unsecured debts, there are specific debts which cannot be discharged with Chapter 7 bankruptcy. For example, the bankruptcy code lists 19 categories of debts that cannot be discharged, although some categories are only barred from discharge if a creditor successfully challenges the discharge.
In addition to specific categories which are not discharged, there are also reasons that a bankruptcy discharge may not be approved (i.e. you violated a court order, you hid financial information, you committed perjury, etc.).
Criminal fines and penalties for DUI injuries
Now, you specifically asked about monies you must pay as a result of your DUI accident. In this case, you were arrested, charged, and convicted of driving under the influence of alcohol or drugs.
At the time of the DUI conviction you were assessed criminal DUI fines and penalties by the court. You might also have been forced to pay criminal restitution to the victim.
None of these criminal fines and penalties are dischargeable, including the restitution, which the courts have ruled is a governmental penalty and is considered a “rehabilitative part of a criminal conviction.”
Now, under the current bankruptcy code you must pay all of these penalties, but these penalties are not what you are really asking about. You asked specifically about a DUI injury settlement that you are required to pay the DUI victim because they filed a personal injury case against you and won, a case which is separate from your DUI criminal case and any associated criminal penalties assessed by the criminal court.
DUI injury settlement for DUI injuries
Unfortunately, while some personal injury settlements are dischargeable in Chapter 7 bankruptcy, the Chapter 7 bankruptcy code has been specifically amended to eliminate any discharge of a DUI injury settlement caused by the debtor’s operation of a motor vehicle (11 U.S.C. §523(a)(9)).
What does this mean for you? You will not be able to discharge your DUI injury settlement by filing Chapter 7 bankruptcy.
If you have been arrested for DUI, you need to talk to a DUI lawyer. Although technicalities on what constitutes a DUI may exist, the following are generally not dischargeable: personal injury claims caused by DUI accidents, a DUI injury settlement from a violent crime which can include DUI, and civil injury settlements from intentional or malicious actions.
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