Not all debts are treated the same in bankruptcy. Unsecured debts are those debts that are not secured by collateral. Of course, secured debt remains secured to the collateral even in bankruptcy, but strictly speaking about unsecured debt-will it all be discharged in the bankruptcy?
Section 523(a)(6) of the Bankruptcy Code provides that a debt "for willful and malicious injury by the debtor to another" is not dischargeable. But what does that mean, to cause a “willful and malicious injury”?
The word willful is defined in Black’s Law Dictionary as “voluntary” or “intentional”. For example you intentionally took out credit debt. This means the credit card debt is “willful”.
But the word "willful" contained in the statute, is modified by the word "injury," indicating that nondischargeability requires the intent to injure- not merely a deliberate or intentional act that leads to an injury. Intention generally requires that the actor intended the consequences of an act, not simply that they competed the act itself.
With the credit card example, most individuals do intentionally acquire the debt-that is the willful part of the nondischargeability analysis. It was a voluntary act. But most debtors who file bankruptcy had every intention of repaying the debt, therefore the injury, the non-repayment of the debt was unintended. The injury was neither desired nor in fact anticipated by the debtor. Therefore, the credit card debt would be dischargeable. Even though the act of using the cards was intentional, the injury to the credit card company was not intended.
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Will all your debts be discharged in a bankruptcy? It depends. Debts arising from reckless or negligent acts that inflict injures are dischargeable. Those debts that arise from intentional acts but the injury was unintended are dischargeable. But those debts that arise from intentional acts and the injury was anticipated or intended by the actor are likely not dischargeable in your bankruptcy. Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com and let us help you get your life back.
