Can bankruptcy wipe out an auto accident judgment?

Can bankruptcy wipe out an auto accident judgment?

Attorney Tom Olsen: I know a lot of people call you because they have many, many, many sources of debt, many, many credit cards and loans out there, but what about somebody that they’re doing okay, everything is going on all right, but maybe they have automobile accident when they're underinsured, and now they only have one creditor out there. One automobile accident, that's caused has somebody to sue them say $50,000. Can you file bankruptcy Chapter 7? That'd be the appropriate one, but just to wipe out one single creditor? Is that possible for somebody?

Attorney Paul Urich: It happens quite a bit. The automobile underinsurance situation is usually the most common when that happens. There's a caveat on that, that if the accident was caused by drunk or drug driving or committing a felony, it is not dischargeable, so you need to make sure you ask a client that to make sure there's not an issue with dischargeability, because if you do nothing in that situation, they will put a lien on your driver's license and it will be suspended.

Attorney Tom Olsen: Bankruptcy would have the ability to stop that, but it's still just a question whether these-- These people again, they got the single judgment. They were in a bad automobile accident, they've been sued for $50,000, it's still a question whether they're going to be filing a Chapter 7 or a Chapter 13.

Attorney Paul Urich: Correct. The same parameters still apply. Most people, I could say, the seven is the most common.