What Bankruptcy CAN’T Do: Intents and Purposes, Part Six
Willful and Malicious
Bankruptcy helps relieve the burden of credit card and loan
debts, medical bills, back utilities and rent, and so forth.
But there are some debts that bankruptcy does not affect;
that are “immune” from a bankruptcy discharge - the word is “non-dischargeable”.
This means that when the smoke clears and the bankruptcy is over, these debts
will still have to be paid.
Previous blogs were about taxes, traffic fines, speeding tickets and
their ilk, student loans and Intentional Debt - that is, lying to get a loan –
either by preparing a false financial statement or otherwise.
Sometimes people get a loan or cash
advance or purchase a luxury item just before filing bankruptcy. The court
presumes you bought the item/got the loan with no intention of paying for it.
***
Two last examples, and these are
pretty obvious …
1)
Debts
incurred due to embezzlement or fraud while acting in a fiduciary capacity. If
you are in charge of your child’s or parent’s trust account and buy yourself a
condo in Bermuda, yep … non-dischargeable.
2)
Injury
to a person or their property while operating a vehicle while intoxicated. At
first this law said motor vehicles only. It was changed to add watercraft and
other vessels because someone, somewhere, managed to win an argument that a
boat was not a motor vehicle (because in bankruptcy – as far as exemptions go –
it is not).
***
Aren’t these
willful and malicious anyway? Not necessarily. If you drained a trust account
to pay for your gambling addiction; or if you are an alcoholic …
Are
addictions and medical conditions enough to rise to the level of willful and
malicious? I wouldn’t want to be the judge to decide that. These exceptions to
discharge are specific enough to take that out of the consideration.
***
What if
these issues have not been ruled on yet? “I’ve only been accused, no court has
said I embezzled that money!” True, but the bankruptcy court can so rule; or
take it back to the circuit court for a hearing and ruling. You may have to
hire a criminal attorney (if your bankruptcy attorney does not wish to take the
case) to help you.
If you were
NOT found to have embezzled the funds, or if it were ruled that you were NOT
intoxicated, that’s a big plus in your favor. You might still have to defend
yourself in other parts of the bankruptcy code that make a debt
non-dischargeable, however.
***
“Intentional Debts” is a large issue
with lots of nooks and crannies that an attorney or a creditor can use against
you. Obviously you will need to discuss your situation with a good bankruptcy
attorney that practices in your area.
Next time I talk about marital debt …
Copyright
2016 Michael Curry
My name is
Michael Curry and I have practiced law in Mount Vernon, Fairfield, Flora and
throughout Southern Illinois since 1992. During that time, I have helped more
than 5,000 people (and businesses) overcome their financial difficulties by
filing for bankruptcy. As a solo practitioner, I will also be happy to help
protect you and your family’s future with estate planning, wills,
powers-of-attorney, real estate transactions and other legal services.
Please
call or text me at 618-246-0993, email me at michael.curry.law@gmail.com or send me a letter: 123 South 10th Street, Suite 507, PO Box 93, Mount
Vernon, IL 62864
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