Can Personal Injury Awards Be discharged in Bankruptcy?
You are the victim of personal injury. You file a lawsuit and win. You receive a judgment that, under the Full Faith and Credit clause in the United States Constitution (Article IV, Section 1) allows you to collect against the person responsible anywhere he or she ventures in the US. However, what happens if the person causing your injury files for bankruptcy?
When the person that owes you money damages for your personal injury files for Chapter 7 personal bankruptcy in Massachusetts your unsecured debts are discharged by the Bankruptcy Court. Isn’t a judgment for personal injury damages simply an unsecured debt?
50 Cent, the Tough Guy Rapper, Bankruptcy and the Personal Injury Debt
According to news reports, 50 Cent, otherwise known as Curtis James Jackson, III, recently filed for Chapter 13 personal bankruptcy. This was allegedly because of a significant judgment in the amount of $7 million awarded to someone who accused him of posting a sex tape of herself on the internet. Without immediate ability to pay, he filed for Chapter 13, which would allow him to payout only a percentage of his debts, over five (5) years, per a Court Approved Plan.
In any event, in addition to the victim of the sex tape, a Massachusetts resident named Dorothy DeJesus attended a 2004 50 Cent concert in Northampton. When someone threw some water on the stage, Mr. Cent, perhaps for theatrics or perhaps for some other reason, jumped from the stage into the crowd and started a fight. Unfortunately, Ms. DeJesus was seriously injured when she was punched in the face. She filed a lawsuit and was awarded $25,000.
Another Massachusetts resident, Candace Scott, was also awarded $25,000 for the injuries she suffered when she was kicked in the eye during the same melee.
Willful and Malicious Injuries are Not Dischargable in Bankruptcy
Like student loans, recent taxes, damages from alcohol related accidents, child support, alimony, secured debts, and awards for willful and malicious injuries are not dischargable in bankruptcy.
How does this work? In the 50 Cent case, Ms. DeJesus’ Massachusetts bankruptcy attorney will likely file an Adversary Proceeding in the Bankruptcy Court. This is similar to a Complaint in state court. After discovery, there will be a hearing. The issue will be if Mr. Cent’s actions were willful and malicious. This is not always easy to prove, as there are various cases on this matter, making the law somewhat unclear, depending on the facts. Nevertheless, it is worth pursuing because there is always room for negotiation, especially when the debtor has a significant income. And, in the 50 Cent case, assets including a 21-bedroom house in Farmington, Connecticut.
Retain An Experienced Bankruptcy Lawyer
If you are the victim of personal injury and the person responsible files for bankruptcy, do not give up. Retain the services of an experienced bankruptcy lawyer. There may be a remedy. First, there may be insurance which would be outside of the assets of the debtor. Second, there may be an issue of willfulness which would require some investigation and legal research.
Attorney Neil Burns has represented victims of personal injury and debtors in Bankruptcy Court for 30 years. He offers a free initial consultation. Call 617-227-7423.