The impact of a car accident may be emotionally and physically devastating. It is even more devastating when it has been determined the car accident was entirely or even partially your fault. What happens when you are underinsured or not insured at all at the time of the accident? The impact of such an event may cause your finances to spin out of control.
Bankruptcy as an Option After an Accident
If you are financially responsible for a car accident you need to take a look into all the options that are available for you. One of the options is that you may be able to file for bankruptcy to discharge those debts depending on your circumstances. Normally your debts related to a car accident are dischargeable. This is true whether the debts are related to personal injury or property damage. You would simply list the debt in a chapter 7 bankruptcy and the debt would be discharged.
There are two (2) exceptions where the debts arising from a car accident are not dischargeable in bankruptcy.
Drunk Driving Accident
The first exception is if the accident was the result of you driving under the influence (DUI) and you caused a death or personal injury to the other party or parties. Your financial obligations to pay any criminal fines, court fees, restitution, and bodily injury to the other party are not dischargeable if it is the result of a DUI.
Willful or Malicious Accidents
The other exception is if the accident was the result of a willful or malicious injury caused by you to another entity or to the property of another entity. An example of this could be if you deliberately ran your car into your neighbor’s fence because you hated the sight of the fence or you hated the sight of your neighbor. Under this exception, both personal injury and property damage are not dischargeable in bankruptcy.
In both of these instances you would have to pay for the debts.
So what happens if you are financially responsible for the debts caused by a DUI or your willful or malicious injury to another person or their property and you do not have the funds readily available on hand to repay the debt? Although the debts are not dischargeable in a Chapter 7 bankruptcy you can file a Chapter 13 Bankruptcy to repay the debts over a period or three (3) to five (5) years. If the debts cannot be repaid within the five (5) years due to your financial circumstances you may always file another Chapter 13 bankruptcy to pay the remaining balance.
If you owe any debt related to an accident it is best to seek the advice of an experienced bankruptcy attorney that will help you either discharge the debts in a Chapter 7 or repay the debts in a Chapter 13 and ultimately help you move on with your life.
At Bond & Botes, our affiliated offices offer free initial consultations. Please feel free to call one of our conveniently located offices to set up a private consultation with one of our experienced attorneys. We will analyze your situation and help you to make the best decision possible to help you eliminate that debt once and for all.
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