It’s not common that a private individual will have personal financial responsibility for damages suffered by another person in a motor vehicle accident. That’s generally covered by automobile insurance. There are, however, isolated instances where you may be sued directly by another person, or by an insurance company, for losses incurred. Can you seek to discharge those debts with a Chapter 7 bankruptcy filing?
When Chapter 7 Allows Discharge of a Car Accident Damage Award
As a general rule, you cannot discharge a jury award in a motor vehicle accident case if you were driving under the influence or intoxicated at the time of the crash. If, however, there’s no evidence that you were impaired, you can discharge the debt, even if your driving was considered reckless. In addition, if your debts were covered or paid for by insurance, you cannot seek to have them discharged.
In a Chapter 13 debtor’s reorganization, you are also prohibited from discharging judgments arising out of a drunk driving motor vehicle accident. Furthermore, Chapter 13 prohibits the discharge of debts that are a consequence of malicious or willful acts. In fact, these types of debts are automatically precluded from discharge, such that creditors need not take any affirmative steps to prevent discharge. The ban on discharge, though, relates only to personal injury losses. You can discharge judgments of property damage resulting from a motor vehicle accident.
Contact Heath, TX Bankruptcy Attorney Carrie Weir
I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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