Have you been ordered to pay restitution for a debt that was the result of drunk driving and want to know if the debt can be discharged in bankruptcy? The answer to your question in this regard isn’t an easy one. This article looks at some sections of the Bankruptcy Code that pose stumbling blocks to discharging a debt from drunk driving.
An arrest for drunk driving can lead to a great financial burden. Drunk driving penalties include hefty fines, suspension of license, and sometimes imprisonment. That can mean loss of income or employment, criminal restitution, and attorney fees. Essentially, a drunk driving charge could drive a person straight into bankruptcy (no pun intended).
Unfortunately, debts resulting from drunk driving can be problematic in a bankruptcy case.
Section 523 of the Bankruptcy Code is the starting point for a determination of debt dischargeability. Section 523(a)(9) states: “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. . . (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;
This is the only provision in Section 523 that speaks directly to debts caused by intoxication. Note that it also only applies to “death or personal injury,” not property damage.
A state court judgment may satisfy all of the necessary elements to meet the exception to discharge found in Section 523(a)(9). In some cases the bankruptcy court may simply grant a plaintiff’s motion for summary judgment based upon the state court’s judgment and findings. While many issues decided by the state court may be given preclusive effect, the standard of proof is different in state court criminal proceedings.
In a criminal case, the standard is beyond reasonable doubt, but the bankruptcy court need only find a preponderance of the evidence. Consequently, a court may determine debts under 523(a)(9) even after a criminal acquittal. See In re Caffey, 24884 B.R. 920 (Bankr. N.D. Ga. 2000).
Section 523(a)(9) only speaks to debts from damage to a person, but that does not answer whether punitive damages are dischargeable in bankruptcy.
Punitive, or exemplary damages are damages intended to deter others from conduct or prevent victims from being under-compensated. That issue was put to rest in the U.S. Supreme Court case of Cohen v. de la Cruz, 523 U.S. 213, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998), where the U.S. Supreme Court ruled that punitive damages are nondischargeable under all subsections of 523(a). Likewise, attorney fees and court costs may also be found nondischargeable. Under Cohen v. De La Cruz, the determinative question for awarding attorney’s fees is whether the creditor would be able to recover the fee outside of bankruptcy under state or federal law.
Section 523(a)(6) of the Bankruptcy Code excepts debts from discharge “caused by willful and malicious injury by the debtor to another entity or to the property of another entity.” Negligent or reckless acts do not fall within the purview of Section 523(a)(6). As the U.S. Supreme Court stated in Kawaauhau v. Geiger, 523 U.S. 57, 61–62 (1998):
“only acts done with the actual intent to cause injury fall within [Section 523(a)(6)’s] scope. The section’s word “willful” modifies the word “injury,” indicating that the nondischargeability takes a deliberate or intentional injury, not merely . . . a deliberate or intentional act that leads to injury.
Further, the injury must result from an intent to injure the victim and the injury must be reasonably foreseeable. Intent to injure is difficult to show in drunk driving cases where the defendant is usually found to have exhibited “reckless disregard,” therefore Section 523(a)(6) is often a losing argument in drunk driving cases involving property damage.
The exception to discharge codified in Section 523(a)(6) does not apply to Chapter 13 cases. See 11 USC § 1328(a)(2), and, Section 523(c)(1) requires a creditor in a Chapter 7 case to file an adversary action to determine a debt nondischargeable under sections 523(a)(2), (4), or (6).
But you have to think quickly because the time for filing an adversarial complaint is generally 60 days after the first date set for the meeting of creditors. If the deadline for filing a complaint is missed, the debt is eligible for discharge and the exception in Section 523(a)(6) does not apply.
Section 523(a)(13) does not discharge a debt “for any payment of an order of restitution issued under title 18, United States Code;[.]” Title 18 restitution covers “(i) a crime of violence, as defined in section 16; and (ii) an offense against property under this title, or under section 416(a) of the Controlled Substances Act (21 U.S.C. 856 (a)).”
Most courts consider a DWI a “crime of violence” under 18 USC § 16. Consequently, and restitution ordered in a DWI criminal case is included in the exception to discharge under Section 523(a)(13). Criminal restitution applies equally to personal compensation and to property damage. However, most drunk driving charges only contain state law charges and do not also include this federal offense.
Section 523(a)(7) contains some confusing language regarding non-dischargeable government fines. It states that a debt is not discharged:
Restitution is sometimes ordered in a criminal case to compensate victims of crime for out-of-pocket expenses, like medical expenses and loss of wages. In 1986, the U.S. Supreme Court held that criminal restitution as part of a condition of probation is non-dischargeable in bankruptcy under 11 U.S.C. 523(a)(7) – See Kelly v. Robinson, 479 U.S. 36 (1986).
The operative language in that decision is that the bankruptcy code “preserves from discharge any condition a state criminal court imposes as part of a criminal sentence.” The Supreme Court emphasized “the fundamental policy against federal interference with state criminal prosecutions.”
Also, the exception to discharge codified in Section 523(a)(7) does not apply to Chapter 13 cases. See 11 USC § 1328(a)(2). However, Chapter 13 has its own criminal restitution statute that is broader than Section 523(a)(7). See below.
Congress made the issue of criminal restitution clearer in Chapter 13 cases. Section 1328(a)(3) states that a debt is excepted from discharge if it is “for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime[.]” This exception applies to all restitution orders. Section 1328(a)(4) disallows discharge of a debt “for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual.” These provisions make discharging restitution in a Chapter 13 case very difficult.
But as difficult as it may be to get a drunk driving debt discharged, at times it’s still possible. I posted the information above to give you a general background into the subject, but presenting all the facts related to your case to your bankruptcy attorney is the only way a determination can be made as to the possibility of discharging your debt.
If you have any questions, feel free to send us an email using our contact page and we’ll respond to you in the most timely manner.