Asked in Bankruptcy, Personal Injury and Car Accidents for New Hampshire

Q: If I lose a personal injury lawsuit from a car accident, can I file bankruptcy after the trial to wipe it out?

4 Lawyer Answers
Cristina M. Lipan
Cristina M. Lipan
Answered
  • Bankruptcy Lawyer
  • Wantagh, NY

A: Generally speaking, bankruptcy discharges (wipes out) most debts. A judgment from a lawsuit is usually dischargeable, except for some due to public policy concerns, see https://www.law.cornell.edu/uscode/text/11/523 (for example, if car accident caused by driving under the influence or if injury was caused by malicious acts). Also, if this is your only debt, the plaintiff-creditor could also object to your discharge if the bankruptcy filing was made in bad faith (for example, if it's really just a 2 party dispute, and you filed bankruptcy only because of that lawsuit). Filing bankruptcy affects all of your assets though, so you'd want to discuss your specific situation with a bankruptcy attorney before filing.

Randy Bryan Ligh and Timothy Denison agree with this answer

W. J. Winterstein Jr.
W. J. Winterstein Jr.
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Boyertown, PA

A: The exceptions to discharge are listed in Section 523 of the Bankruptcy Code.

Subsection 523(a) excepts debts incurred for-

"6) for willful and malicious injury by the debtor to another entity or to the property of another entity";

"(9) for 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";

Whether your potential liability after the trial is dischargeable may well depend upon the wording of the verdict/judgment in the court in which your personal injury suit is tried. But at times, the Bankruptcy Court may "look behind" a state court judgment to determine whether an exception to discharge applies. Outcomes can also vary by from one federal district to another. Speak with a bankruptcy attorney in your federal district to get the best answer. That lawyer may also be able to suggest other paths to deal with your looming liability.

Randy Bryan Ligh and Timothy Denison agree with this answer

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Yes.

Randy Bryan Ligh
Randy Bryan Ligh
Answered
  • Personal Injury Lawyer
  • Baton Rouge, LA

A: I agree with the posts of my colleagues, and repeat that before you file bankruptcy, you should meet with a bankruptcy attorney and discuss whether or not filing bankrupcty is in your overall best interests as it potentially impacts all of your assets.

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