The “Willful And Malicious” Injury Exception To Discharge In Bankruptcy

Why Willful And Malicious Injury Debts Can’t Be Discharged When Filing Bankruptcy

Unexpected circumstances and overwhelming debt can happen to almost anyone. For many individuals struggling with insurmountable debt, the only chance that they have to ever get out of debt is to seek out a fresh start through filing chapter 7 bankruptcy. The purpose of declaring bankruptcy is to provide a debtor with a fresh start. According to a bankruptcy attorney filing bankruptcy allows the debtor to begin with a clean debt slate. As great of a concept as this may seem, there are some cases where a bankruptcy attorney can determine that it would be unfair to allow a debtor to have a particular debt discharged. The Bankruptcy Code prohibits discharge of such debts, as any Mesa AZ bankruptcy attorney can tell you. One example of such a debt that is unable to be dis-charged through bankruptcy is the willful and malicious injury exception. When you contact a bankruptcy attorney, your first legal consultation is free with no obligation, and you’ll pay no attorney’s fee unless we win your compensation.

What Qualifies As A Willful And Malicious Injury Exception?

The willful and malicious injury exception is when the debtor has committed a willful and malicious injury to another person which is when they should hire a personal injury attorney. That debt associated with the injury is not allowed to be dis-charged in bankruptcy. According to Paul Pimentel, the Bankruptcy Code in section 523(a)(6) provides that an individual debtor may not discharge a debt “for willful and malicious injury by the debtor to another entity or to the property of another entity.” These injuries are known as “intentional torts,” and include personal injury lawsuits where the debtor acted intentionally as opposed to negligently or recklessly, where people need to use an ankle brace.

Bankruptcy According To The United States Supreme Court

For the longest time the United States Supreme Court interpreted the willful and malicious injury exception very broadly. From 1904 until 1998, to exempt a debt from discharge under the exception, one only needed to prove that the debtor’s act was intentional and necessarily caused injury. If you ever suffer an injury, make sure to contact a personal injury attorney for some great service. The existence of malice was assumed from the fact that an intentional act caused the injury. The 1998 U.S. Supreme Court case of Kawaahuau v. Geiger stated that for bankruptcy purposes, the term “willful” refers to the injury rather than to the act. The debtor must act with the willful intent to cause the injury, rather than willfully acting that results in an injury. If the debtor did not act willfully to cause an injury, the debt is dis-chargeable.

Differences Regarding Chapter 7 And Chapter 13 Bankruptcy

A chapter 7 bankruptcy lawyer discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. However in a chapter 7 bankruptcy there are many exceptions to the discharge. One of those exceptions is the Willful damage to property. The Willful damage to property is dis-chargeable in a Chapter 13 bankruptcy case. Consumer protection laws let you hold debt collectors, mortgage companies, and credit reporting agencies accountable for the harm they cause you. If we file a lawsuit on your behalf you don’t pay anything, if we win the debt collector, credit reporting agency or mortgage company pays our fees and your damages.

Other Circumstances Where Willful Damage Is Non-dischargeable

There are other circumstances where a Willful damage is not dis-chargable, certain injuries caused by operating a vehicle under the influence of alcohol are non-dis-chargeable. In order for the debt to be exempted from the bankruptcy discharge, the injured party must file an “adversary proceeding” within 60 days of your 341 hearing (Meeting of the Creditors). If the adversary case is not filed by the injured party within that time period the debt is then included in the bankruptcy and will be discharged. If the adversary proceeding is filed properly and on-time, the bankruptcy judge will conduct a hearing to determine if the injury was caused willfully.

Get In Touch With An Experienced Attorney In Arizona Today

If you have committed an intentional tort and cannot afford to pay the debt, you will need to weigh your options available to you. Consulting a business bankruptcy lawyer may help you completely explore all of the debt relief options that are available to you. You have debt, there are options for relief. In some cases bankruptcy can discharge the debt, or can provide you time to pay the debt under court supervision over three to five years. Bankruptcy can be a handy debt relief tool as it shields your assets and wages for a time while you repay what you can afford. Make sure to carefully weigh all of your options before making your debt relief decision.

This blog is courtesy of Arizona Bankruptcy Law Attorneys, a bankruptcy law firm serving Phoenix, Mesa, Glendale, and more.

Written By Evan Bornmann
The Bornmann Law Group, PLLC
480-833-8000
1731 W. Baseline Road, #100
Mesa, AZ 85202
http://bankruptcy-az.com

Gunderson, Denton & Peterson, P.C.

Mesa Location:
1930 N. Arboleda, Suite 201
Mesa, Arizona 85213
Office: 480-655-7440
Fax: 480-655-7099
Email: contact@gundersondenton.com
Website: GundersonDenton.com