Suppose you’re driving home from a New Year’s Eve celebration.  At the party you had one too many glasses of Krug Champagne.  Suddenly a light pole leaps in front of you and you hit it.  You’re badly injured.  You get fine treatment at the hospital, and later receive a bill for $100,000 for the care.  You can’t pay it, so you file for bankruptcy protection.  Is the medical debt dischargeable?

Notice that the party who was physically injured in the accident is the bankrupt debtor ― not some third party.  But is the hospital a party that was also injured as a result of your drunk driving?

I.  A Brief History Of Drunk Driving Debts In Bankruptcy

Let’s change our hypothetical fact pattern a bit.  Suppose that when you drove home from the New Year’s Eve bash, you hit, not an errant light pole, but another car.  In the process you injured the other driver ― someone you didn’t know.  Now you have a bill for $100,000 for the other driver’s medical care.  Is that debt dischargeable in bankruptcy?  There was a time in American history when the answer was a resounding, “Maybe.”  (That’s a nice vague answer.  Someone once told me that if he didn’t know what he was talking about, he kept his comments vague.  However, in this case “maybe” is not a vague answer because it comes with the qualification that it depended on the facts and the court in which the case was heard.)

     A.  The Relevant Statute At The Time

At the time when the answer to our question was maybe, the relevant statutory provision that plaintiffs used was:

A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt — . . . for willful and malicious injury by the debtor to another entity or to the property of another entity.

11 U.S.C. § 523(a)(6).
Continue Reading

For those of you who have been living in a cave without access to any news of the day, I would bring you up to speed on the ever expanding sex abuse/sexual harassment scandal that implicates many famous Hollywood types, politicians, religious leaders, big business execs, . . . , and the list just keeps on growing; but if you’re still living in your cave, you probably won’t read this post.

For those of you who aren’t living in a cave, but haven’t been paying attention to the salacious details, here’s the classic comic book version.  Many famous and powerful people have recently been accused of sexual harassment.  The list of the accused includes both men and at least one woman.  As the list grows, the likelihood that at least one accuser (maybe many more) will file civil actions against the accused increases.  Since this is a bankruptcy blog, our question of the day is:

Question:  Can the accused discharge any financial liability associated with the (alleged) harassment in bankruptcy?

Leaving aside the fact that most, if not all, of the accused are multimillionaires who probably won’t seek bankruptcy protection, the question is still worth addressing because people who don’t occupy the rarified world of big ticket corruption can still face such accusations.
Continue Reading