Bankruptcy- Discharge-DWI

Posted by Kevin on April 1, 2012 under Bankruptcy Blog | Be the First to Comment

Say on St. Patty’s day, you go to the parade in Hoboken (not this year); hoist a few; drive home and get into an accident.  Thank heavens, you did not kill anybody, but a couple of people were hurt and sue you.  Moreover, the Bergen County police (or Passaic County, take your pick) nail you for DWI.  The injured get judgments against you.  You file bankruptcy.

You are not going to get a discharge from the debts associated with the injuries.  Section 523(a)(9) excepts from discharge a debt associated with death or personal injury caused by the debtor’s operation of a motor vehicle, boat or aircraft if debtor were legally intoxicated on alcohol or drugs.  Moreover, the creditor does not have to file a complaint in the bankruptcy to have the debt declared non-dischargeable.  In a recent Kentucky case, the insurance carrier of a person injured in a car accident with the debtor who was DWI notified state authorities of a judgment after a discharge was granted.  The insurance company never filed a dischargeability complaint in the bankruptcy.  The debtor’s driver’s license was suspended.  He incurred costs in getting his license reinstated including attorneys fees and sued the insurance company for violation of the discharge injunction.  Held:  FOR THE INSURANCE CARRIER.  Under subsection (a) (9), the creditor does not need to file in bankruptcy court.  In this case, the discharge order indicated that debts from personal injuries incurred while debtor is DWI are not discharged.  In additon, the court held that the insurance carrier steps into the shoes of the injured party since it paid the injured party.  The solution:  DON’T DRINK AND DRIVE.