Does Bankruptcy Wipe Out Drunk Driving Debts?

29 Dec Does Bankruptcy Wipe Out Drunk Driving Debts?

Maybe. It all depends upon the nature of the debt, and whether the creditor/victim files an action in the bankruptcy court prior to the claims bar date. There are essentially two separate bankruptcy statutes that concern non-dischargeability of drunk driving debts.

The first concerns bodily injury or death. If “death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance,” then the debt will be deemed non-dischargeable. The creditor/victim also does not need to do anything special in the bankruptcy court as this type of non-dischargeability is “automatic.”

Nevertheless, it is always wise to have the elements for non-dischargeability under these circumstances declared by way of Declaratory Relief in a Bankruptcy Court Order prior to case closing, as a debtor who successfully challenges whether there was in fact no unlawful intoxication at a later date in a different proceeding might also be able to assert a claim for a violation of the discharge injunction against the creditor/victim!

The second type of non-dischargebility for a drunk driving debt occurs in the context of property damage if it is determined willful and malicious. If a rental vehicle is wrecked, utility pole taken out, another car damaged without any personal injuries, or some other property damage claim is listed in a bankruptcy case, exclusive of any personal injuries, then those debts will be wiped out unless the creditor timely brings an action in the bankruptcy court and prevails.

Generally, the creditor must file a separate lawsuit, called an Adversary Proceeding, in the Bankruptcy Case, and usually within 60 days of the first meeting of creditors. If the Adversary Proceeding is missed by as little as one day, then that debt is discharged.

There may be other grounds as well that provide for non-dischargeability drunk driving debts, depending upon the circumstances. For example, certain government fines, restitution, and other drunk driving related issues may also lead to non-dischargeability. For further information on Bankruptcy and Drunk Driving debts, please click here.

Written by Michael G. Doan

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