Bankruptcy: An Examination of the Dischargeability of Debts Regarding Property Damage-Malice

     In a past blog I announced that we would begin a multi-issue review of cases that address the dischargeability of debts regarding property damage-malice. The relevant bankruptcy code provision is §523(a)(6).
     Several cases illustrate well the dischargeability of debts involving property damage. In all cases, the trial and appellate courts are required to adhere to Bankruptcy Code §523(a)(6), which states that a debt causing willful and malicious injury to another entity is not exempt from discharge.
     The standard established by the courts to prove willful and malicious injury is described by the court in St. Paul Fire & Marine Ins. Co. v. Vaughn. In Vaughn, the Court of Appeals for the Fourth Circuit stated that the debtor must show, by contradicted and unimpeached evidence, to have committed a willful and malicious injury to the creditor’s property. There is no requirement of specific malice on the part of the debtor, however. The court held that “willful and malicious” injury means injury that is wrongful and without cause or excuse, but the debtor does not necessarily need to have ill will.
     However, this is a very general definition. Courts have applied this standard to many different situations and it is clear that this standard is very fact specific.  A future blog will apply and expand this standard in a case involving rented property.