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Accidents are devastating, and victims are often left with serious injuries. Under Florida law, there are instances in which accident victims can file a lawsuit against negligent parties when they have caused an accident. Through a lawsuit, victims can claim compensation for their medical expenses, lost income, and other losses.
Being named in a lawsuit is almost as bad as being the accident victim. A legal obligation to pay damages can have a negative impact on a person financially, and make it harder for them to pay for their daily expenses. For many people, this leads to them considering filing for bankruptcy to discharge the debt so they are no longer responsible for it. So, if you have a debt incurred as a result of injuries or property damage, can you discharge it in bankruptcy?
Filing for Bankruptcy to Discharge Debts Related to Injury and Property Damage
Generally speaking, it is possible to file bankruptcy to discharge debts related to injury and property damage. For example, if someone got into a car accident and did not have proper insurance, anyone injured may file a claim against them. If the liable party could not afford to pay damages, they may file either a Chapter 7 or Chapter 13 bankruptcy and discharge the debt. However, there are some exceptions to this that could hinder a person from filing bankruptcy.
The first exception is when the accident was the result of you driving under the influence (DUI) of alcohol or drugs. If you were drunk and breaking the law at the time of the accident, you are still responsible for paying any court fees, criminal fines, restitution, and damages for bodily injury. You cannot discharge these debts during bankruptcy.
The second exception is when you willfully or maliciously caused the accident. For example, if you hated the new fence your neighbor installed and drove into it with your vehicle, that is a willful and malicious act. If your neighbor filed a lawsuit against you to recover their financial losses that resulted from your malicious actions, you cannot discharge that debt in bankruptcy.
How a Chapter 13 Bankruptcy May Help
Even when debt pertaining to injury or property damage cannot be discharged through a Chapter 7 bankruptcy, a Chapter 13 bankruptcy may help. Filing a Chapter 13 bankruptcy does not discharge all of your debt, but instead creates a repayment plan for the debt. Through a repayment plan, you may be able to pay the debt over a period of three to five years. If the debt cannot be paid off within five years, you may be able to file Chapter 13 bankruptcy again to create another repayment plan.
To determine the basic structure of the repayment plan, you will have to take a means test. Using Form 122C-1, you can determine your average monthly income and the length of the repayment plan. The amount of your income is then compared with the average income in Florida for people with the same number of people in their household, and marital status.
Using Form 122C-2, you can determine the amount of disposable income you have to pay back the debt. You can claim a number of different deductions when determining the amount of disposable income you can use to pay back the debt. These deductions can include the cost of health insurance and food. The IRS has strict standards about how many deductions can be claimed in each category.
Creating and Following the Repayment Plan
Once you have completed the means test, you can draft the repayment plan, but you should always work with a Broward County bankruptcy lawyer. A lawyer can advise on your unique debts and disposable income. After you have drafted your repayment plan, you must submit it to the court for approval within 14 days of filing the bankruptcy.
It can take up to three months for a repayment plan to be approved, but you will have to start making payments within 30 days of filing. You will have to pay your bankruptcy trustee, who is appointed to your case shortly after you file. The trustee is the go-between for the bankruptcy court, you, and the individuals you owe money to.
It is critical that you follow the payment plan the court approves. If you miss a payment or stop making payments, the court may dismiss the bankruptcy case, which essentially cancels it. You will end up back where you started, with the debt for personal injury or property damage. With other types of debt, you may still be able to file a Chapter 7 bankruptcy. However, if the debt is included in one of the exceptions, this will not be an option.
Why You Need Legal Representation
Many people think filing bankruptcy is a fairly straightforward process, but it is not. This is particularly true if you have debts due to injury or property damage. The time after an accident is already stressful, especially when you are being held liable for paying damages. One mistake such as filing the wrong type of bankruptcy could also result in your bankruptcy case not being approved, and a lawyer will prevent that from happening. The bankruptcy process is also very complex for those unfamiliar with it. A bankruptcy lawyer will know the system and the steps to take to protect your case and give you the best chance of success.
Call Our Bankruptcy Lawyers in Broward County Today
Filing bankruptcy is never easy, but a Broward County bankruptcy lawyer can help. At Loan Lawyers, our skilled attorneys will review the facts of your case and help you make the best decision possible to help you get rid of the debt once and for all, regardless of the type of debt you are carrying. Call us today at (954) 523-4357 or fill out our online form to schedule a free consultation and to learn more about how we can help.
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Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.
