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Exception to Bankruptcy Discharge: Willful and Malicious Injury

Written by Col Ovik | July 7, 2023 at 10:30 AM

Not all debts in a bankruptcy are treated equally, and some debts can be excepted from the bankruptcy discharge. Under § 523(a)(6), the creditor must demonstrate "willful and malicious injury by the debtor" to another person or their property, and if a creditor can successfully demonstrate a willful and malicious injury by the debtor the creditor’s claim can be excepted from discharge. 

 

Three elements must be satisfied: (1) the debtor caused an injury to the creditor; (2) the injury was willfully inflicted; and (3) the debtor's action was malicious.  The "willful" and "malicious" elements are distinct: a debtor's conduct must be both "(1) headstrong and knowing ('willful') and, (2) targeted at the creditor ('malicious'), at least in the sense that the conduct is certain or almost certain to cause financial harm.

The first required element is the injury.  An injury refers to the "invasion of the legal rights of another.”

Second, the "willful" element of § 523(a)(6) requires a deliberate or intentional injury, not just a deliberate or intentional act that leads to an injury. Proof of subjective intent to cause the injury may be satisfied by "proof that the debtor desired to bring about the injury or was, in fact, substantially certain that his conduct would result in the injury that occurred."  

The third element required by § 523(a)(6) is "maliciousness."  A mere violation of legal rights does not imply malice absent additional aggravated circumstances.  Malice requires conduct that is more culpable than reckless disregard of a creditor's economic interests. Were the actions of the debtor intended to "hinder, delay or defraud” the creditors, or were the debtor’s actions or transactions simply mismanagement of funds or a result of bad decision making. 

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Creditors can dispute the dischargeability of their claims. If the creditors can prove the elements of Section 523(a)(6) the debt will be excepted from the debtor’s discharge of debts.   Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com and let us help you get your life back.