Can a person that lost a civil lawsuit discharge the award in bankruptcy

Asked almost 6 years ago - Mc Ewen, TN

can a person who has been sued and has had a court ordered settlement awarded against them file bankruptcy against the settelment. In tennessee

Attorney answers (3)

  1. Margery Ellen Golant

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    Contributor Level 20

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    Answered . I am assuming that what was awarded by the court was a judgment. If so, then, yes, if you qualify for Chapter 7, you can normally discharge judgments in bankruptcy, unless they are based on fraud or intentional misconduct.

  2. Cass S Weil

    Contributor Level 8

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    Answered . You may discharge your personal liability for any debt in bankruptcy, even if you agreed to the settlement in a court proceeding, unless the debt falls into one of the categories of debts that are excepted from discharge. As the first answer noted, debts incurred by fraud are not dischargeable. Other kinds of debts that are excepted from discharge include debts arising out of divorce, breach of fiduciary duty, larceny, or "willfull and malicious injury" to a person or property. There are other categories of debts that may be excepted from discharge. You should consult with a bankruptcy attorney in your area to find out whether your debt is dischargeable and whether you are a candidate for bankruptcy relief.

  3. Brett D Weiss

    Pro

    Contributor Level 18

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    Answered . Generally speaking, yes. Two caveats, however:

    1. Liens resulting from the judgment are not wiped out without bringing a separate lien avoidance action (which might not be available, depending on the specifics of your case); and

    2. If the basis for the judgment was fraud or other wrongful conduct (but not negligence), the creditor may ask the Court to declare the judgment non-dischargeable, which means that you would still be liable notwithstanding the bankruptcy.

    Speak with an experienced local bankruptcy attorney for more information.

    Brett Weiss
    brett@BankruptcyLawMaryland.com

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