February 26, 2020

Debts Arising from Impaired Driving are Not Dischargeable

Recently I met with a client who was looking into filing bankruptcy because of credit card and medical debt.  Among his creditors, however, was an individual, an insurance company and fines due a local county.  When I asked about this, he explained that about a year ago, he was involved in an auto accident that was his fault.  He further explained that the individual sued him and that damages awarded were more than his insurance coverage, and that he also had fines because the accident occurred when he was under the influence.

He was unhappy to learn that Section 523(a)(9) of the Bankruptcy Code specifically excepts from discharge debts arising from the “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.”

I read this Code section to mean that my client cannot discharge:

  • any damage award due to the accident victim
  • restitution ordered by the local county court
  • fines imposed by the local county court

What about property damage arising from this drunk driving accident.  I read the Code section to limit non-dischargeability to personal injury so I do not think that property damages would be excepted here.

Washington D.C. bankruptcy lawyer Morgan Fisher wrote a post about DUI damages and bankruptcy dischargeability last year.  He notes that an insurance company seeking subrogation damages (recovery of car repair payments from the negligent driver by an insurance company) could argue against dischargeability under other provisions of Section 523.   I believe that Morgan is referring to Bankruptcy Code Section 523(a)(6) which excepts from discharge debts arising from the “willful and malicious injury by the debtor to another entity or to the property of another entity.” [Read more…]

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