Liability car insurance is suppose to cover an “at fault driver” in the case of a car accident. But what happens when one party sues another for an amount that is above and beyond the coverage provided by the car insurance company. For example, what if you are sued for $1 million dollars in car accident lawsuit? Well, most times the insurance company will settle with the plaintiff in the lawsuit for an amount well below what they are asking for; but there are other times when the plaintiff goes after the personal assets of the driver who caused the car accident. Can bankruptcy protect this driver being sued because of the car accident? Well, bankruptcy may be an option to protect this “at fault driver” but it depends on a few factors. The first factor is the cause of the car accident. If the “at fault driver” had a car accident because they were under the influence of drugs or alcohol, the debt cannot be discharged in bankruptcy. If the “at fault driver” willfully or maliciously caused the car accident, then the debt cannot be discharged in bankruptcy. If on the other, the car accident was not cause by a DUI and was not malicious or willful, the debt might be dischargeable in bankruptcy. If you are facing a personal lawsuit for a car accident, speak with a bankruptcy attorney before you go to trial to find out what bankruptcy options may be available to you.

Pet food shop owner Mark Poveromo was ordered by a Connecticut bankruptcy judge to repay money collected in a judgment against construction company owner Mark R. Koch.

In 2006, Poveromo hired Mark R. Koch to construct a building for his pet food business for $80,000. Poveromo paid $39,500 up front, but Koch never did any work, according to court documents. Poveromo filed a criminal complaint, and Koch was convicted of first-degree larceny and ordered to pay restitution. Koch paid $25,000 and began monthly payments to Poveromo on the balance, but two months before his larceny conviction, Koch had filed for bankruptcy protection in St. Louis, halting any monetary claims against him. Koch stopped payments and

Poveromo had him arrested but later claimed he did not receive the bankruptcy notices. Because of the arrest, Koch filed a complaint with bankruptcy court accusing Poveromo of intentionally violating the stay on claims by having him arrested to collect on the debt.

The bankruptcy judge Rendlen ruled in Koch’s favor ordering Poveromo to pay back the payments Koch had given him as well as attorney’s fees and costs. "Allowing a creditor to use the threat of incarceration on charges related to a prepetition debt undermines the most fundamental premise of bankruptcy law: the guarantee of equal treatment among creditors pursuant to the bankruptcy code," Rendlen wrote.