Exemptions to discharge

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).
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