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Bankruptcy Litigation

Fourth Circuit: Debt Incurred As a Result of Willful and Malicious Injury May Be Dischargeable

The U.S. Court of Appeals for the Fourth Circuit recently held that a debt incurred as a result of a willful and malicious injury may nevertheless be dischargeable notwithstanding the provisions of 11 U.S.C. Section 523(a)(6).

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The U.S. Court of Appeals for the Fourth Circuit recently held that a debt incurred as a result of a willful and malicious injury may nevertheless be dischargeable notwithstanding the provisions of 11 U.S.C. Section 523(a)(6). TKC Aerospace v. Muhs (In re Muhs), 923 F.3d 377 (4th Cir. 2019). The court found it to be of no consequence that a debtor’s conduct giving rise to the injury, without more, was shown to be intentional; rather, the debtor must also have intended to cause injury to the creditor. In so holding, the TKC court has issued guidance to creditors seeking recovery of high-dollar lawsuits; proceedings that oftentimes precipitate bankruptcy filings.

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