When you file for bankruptcy protection, your primary goal is typically to discharge or eliminate your debt. However, it is important to understand that there are certain types of debt that the law excludes from being discharged. Pursuant to 11 U.S.C. §523(a)(9), one type of debt that is not eligible for discharge is one 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.”
In other words, if you were driving under the influence of drugs or alcohol and you caused a wreck, any debt you owe to the victims of the accident cannot be discharged. In most cases, you cannot eliminate restitution damages or monetary penalties imposed by the court.
It is possible that an insurance company seeking to recover subrogation damages will file can objection to your discharge pursuant to 11 U.S.C. §523. Debts resulting from the “willful and malicious injury by the debtor to another entity or to the property of another entity” are excluded from discharge under section 523(a)(6).
You should also be aware that the bankruptcy courts follow the state law of the jurisdiction where your criminal prosecution was held. This means that the results of the blood alcohol limit of the state where you got your DUI will apply, not the state where you file your bankruptcy case. This prevents debtors from “forum shopping” and filing their bankruptcy case in a jurisdiction with a higher blood alcohol level in an attempt to escape liability.
If you have DUI-related debt and you are considering filing a Chapter 7 of Chapter 13 case, it is essential to obtain legal help. One of our personal bankruptcy attorneys can review all of your debts and help you understand how each of them will be handled in your filing.
If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.