Car Accidents and Bankruptcy: A Summary

My last three posts have discussed the dischargeability of certain debts related to auto accidents. There are several distinctions to make... Chapter 7 or Chapter 13? Intoxicated or not? Willful and/or malicious? Personal injury or death? Or just property damage? I'll attempt to summarize the distinctions below. Please review my previous blog posts "Car Accidents and Bankruptcy, Parts I, II, and III for great detail.

Below is an attempt to summarize, in shorthand, what is (and is NOT) discharged in both Chapter 7 and Chapter 13 bankruptcy when dealing with damages in an auto accident.

Damages Discharged in Chapter 7:

  • Not willful and malicious, AND;
  • No intoxication or drugs influencing accident
  • Intoxication/influence causing only property damage

Damages NOT Discharged in Chapter 7:

  • Willful AND malicious damage to either property OR person, OR;
  • Intoxication/influence causing personal injury or death

Damages Discharged in Chapter 13:

  • All damages related only to property
  • Damages related to personal injury/death but NOT willful OR malicious

Damages NOT Discharged in Chapter 13

  • Personal injury or death resulting from intoxication/influence OR willful act OR malicious act

NOTE: Even though a debt may be "dischargeable" in Chapter 13, it may still end up paid in full or in part depending on the rate at which the debtor is required to repay unsecured creditors. More accident-related debts are dischargeable in Chapter 13 due to this being the case.