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Debt Discharged in Bankruptcy

Debt Discharged
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Which Debts can be Discharged in Bankruptcy?  Here is an example of a motor cycle accident debt was discharged in bankruptcy.   

After obtaining a judgment, many Debtors file bankruptcy.   The determination as to whether a debt is dischargeable sometimes results in an adversary complaint.   The Bankruptcy Court must rule on whether the debt is dischargeable.   

Below is one case in which details specific circumstances that allow the debt to be discharged in bankruptcy. 

Background:

  • 3 acquaintances went out on a motorcycle ride together.
  • One rider collided with another rider.
  • Substantial damages were sustained and the complaint was filed.
  • Judgment was won through a default judgment.
  • Defendant filed for bankruptcy.
  • The injured party presented to the Court that it should not be discharged in bankruptcy for the following reasons:   Debtor purposely drove into his motorcycle, the State Court Order had language as to willful and malicious conduct and the driver did not have a motorcycle license or insurance.
  • The injured party stated the Debtor purposely veered into his lane to hit him.
  • The court case was conducted in Bankruptcy Court.  
  • The Debtor stated that he had 5 years of experience riding motorcycles before the accident.  In addition, he states that it was an accident and it was not willful or malicious in his conduct.

Court Ruling:

  • The State Court’s language about willful and malicious was unnecessary to the judgment because the complaint was based on negligence.  
  • In the hearing, the injured party failed to demonstrate willful and malicious acts.
  • There was contradicting the testimony of all 3 riders.
  • The court ruled that nothing presented would lead one to believe that the Debtor purposely collided with another motorcycle.
  • The testimony presented by the injured party was most favorable to him.
  • The fact that the Debtor had no license or insurance was not sufficient to prove the intention to cause injury.
  • The debtor had substantial experience in riding.
  • The court ruled debt was dischargeable and could see no evidence that there was rage or willful intention that caused the accident.
  • Bad driving does not constitute willful and malicious behavior.  https://www.lawjournalnewsletters.com/2020/11/01/nondischargeability-judgment-requires-willful-and-malicious-injury-under-section-523a6/

If you have been sued in a motor vehicle accident, you may be able to discharge that debt in bankruptcy.   I offer a free consultation:   Ralph A. Ferro, Jr., Esq. Contact Me