66 East Main Street, 3rd Floor Little Falls, NJ 07424

Chapter 7 Debtor Destroys Borrowed Car – Dischargeable?

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  • Worked for a Dealership and drove one of the dealership’s cars home without permission
  • Felt her car was not safe to drive.
  • Drove car back to work and was involved in a multi-vehicle accident; car was totaled.
  • Pleaded guilty to unauthorized use of a vehicle and ordered to pay restitution.
  • Filed for Chapter 7 Bankruptcy.
  • Dealer filed adversary proceeding to state that the claim for restitution was not dischargeable.

Bankruptcy Court Ruling

  • Debtor did not intentionally or deliberately cause any damages.   Although involved in the accident, Debtor was not planning on or committed an intentional act.
  • Court dismissed the Dealership’s complaint.
  • Debt was dischargeable.