Does a non-dischargeability of debt claim 11 U.S.C. §§ 523(a)(6) and
523(a)(7) apply to administrative proceedings?

Question

I filed for chapter 7 bankruptcy. The trustee abandoned my home back to me and declared my bk a no-asset case. The L.E.A., Local Enforcement Agency, then filed a non-dischargeability of debt claim pursuant to 11 U.S.C. §§ 523(a)(6) and 523(a)(7). The matter is currently under appeal before CalRecycle. Since the LEA's  claim is based upon the outcome of a hearing before the Solid Waste Facilities Board, I was told that it meets the classification of an administrative hearing and that as such, any debts arising out of their claim should be dischargeable. Is this true?

James L. Arrasmith · Answer

The question of whether a debt is dischargeable in bankruptcy can be complex and may depend on the specific facts and circumstances of the case, as well as the applicable law. Generally, debts arising from administrative proceedings, such as those before a regulatory agency, may be dischargeable in bankruptcy if they meet the requirements of the bankruptcy code. 
 
Under 11 U.S.C. § 523(a)(6), debts arising from willful and malicious injury to another person or property are generally non-dischargeable in bankruptcy. Similarly, under 11 U.S.C. § 523(a)(7), debts arising from fraud or defalcation while acting in a fiduciary capacity are also generally non-dischargeable. 
 
If the debt claimed by the LEA arises from conduct that would fall under these sections of the bankruptcy code, then it may be non-dischargeable. However, it is important to note that the specific facts and circumstances of the case, as well as the outcome of the appeal before CalRecycle, could impact the ultimate determination of whether the debt is dischargeable. 
 
It may be helpful to consult with a bankruptcy attorney who is experienced in this area of law to discuss your specific situation and options.

Q: Does a non-dischargeability of debt claim 11 U.S.C. §§ 523(a)(6) and 523(a)(7) apply to administrative proceedings?