Can a debt arising from a sanction in a state civil lawsuit be eliminated in bankruptcy?

Asked about 2 years ago - Key Biscayne, FL

We have a civil suit against some defendants. They failed to admit the genuineness of some documents that we ultimately proved were genuine, and the judge said they have to pay us for costs incurred in proving that these documents were genuine. These costs amounted to over $10,000. Can they eliminate that debt in bankruptcy?

Attorney answers (3)

  1. Jonathan Benson Alper

    Pro

    Contributor Level 6

    1

    Lawyer agrees

    Answered . I agree with the conclusion of the other attorney answers. However, I currently represent a Chapter 7 client who has a large civil sanction in the form of an attorneys fee award. The attorneys fees were awarded the creditor for my clients violation of court orders and misrepresentations. The creditor is objection to discharge on the grounds that my clients intentionally injured the creditor. Intentional injury is an exception to discharge.

    I believe the creditor's position is not well-founded. But, the case illustrates that creative and aggressive creditors may challenge discharge of civil court sanctions, and that debtors will have the expense of defending such allegations, regardless of ultimate merit.

    You should not rely upon this answer as legal advice or a legal opinion, and this answer does not create between... more
  2. Robert A. Stumpf

    Contributor Level 19

    Answered . I believe they can, yes. There might possibly be more to the story that would point otherwise, for example if they committed outright fraud that would be a problem for them.

  3. Kathryn Ursula Tokarska

    Contributor Level 16

    Answered . In the absense of proved fraud, yes.

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