Can Bankruptcy Eliminate A Personal Injury Judgment?

We encounter personal injury judgments in two contexts: (1) the injured party or injured party’s insurance company has a judgment against you for a car accident, or (2) whether personal injury judgments can be wiped out in a bankruptcy case. The simple answer is that, yes, personal injury judgments can be discharged, or eliminated, by filing bankruptcy.

Florida Statute Section 324.121 provides that the Florida Department of Highway Safety and Motor Vehicles has the authority to suspend the driver license and registration of anyone who has a personal injury judgment entered against them, with a few exceptions. Unfortunately, many judgment debtors come to us after the car accident and after the judgment has been entered and sent to the Florida DMV. In that scenario, we have two options: (1) pay off the judgment, or negotiate to pay off the judgment in installments (an option that is largely unaffordable), or (2) file bankruptcy to discharge the judgment. Once discharged, you can contact the DMV to have your driver license suspension reversed.

Incidentally, there is a split amongst the courts as to whether the insurance company that obtained the personal injury judgment has any responsibility to cooperate in getting the driver license suspension reversed.

The next question, then, is whether a bankruptcy will eliminate a personal injury judgment. The answer is largely yes. Under Section 523 of the Bankruptcy Code, the bankruptcy code does not eliminate debts:

• “For willful and malicious injury by the debtor to another entity or to the property of another entity.”

• “For death or personal injury caused by the debtor’s operation of a motor vehicle … if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.”

Accordingly, if the accident was the result of a DUI or DWI, the debt would be non-dischargeable, but if it was a simple fender-bender where no DUI or DWI was involved, then it would be dischargeable.

For more information on bankruptcy or personal injury, please subscribe to the Yesner Law Podcast, on iTunes, Stitcher and GooglePlay. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at shawn@yesnerlaw.com.

Shawn M. Yesner, Esq., is the founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate debt by providing options, so they can live the lifestyle of their dreams. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.