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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Are all kind of punitive damages awarded by the court in NY

Resolved Question:

Are all kind of punitive damages awarded by the court in NY considered to be non-dischargable debt for BK purposes. If NOT all punitive damages are considered non-disachargable in BK - then what do I ineed to do in the civil court proceedings to make sure that they would be non-discahrgable. As I understand that the federal BK court looks into the language of the NY civil court decsion to make the determination of whether debt is discahrgable or not. Except for ruining someone credit history when the person cannot pay the punitive damages - would this person also suffer any collateral damage with difficulty of being hired on a job because it shows that there is a PUNITIVE damage judgemnt against this person.

On a slightly different topic, for the case of non-punitive economical damages in case of a joint-several liability where the deep pocket defendant must pay for the fault and judgment of the shallow pocket defendant. And if the deep pocket pays the judgment against the shaloow pocket - would this fact in itself have a negative impact on the shallow pocket credit history - even though the judgment is fully paid.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.

cfortunato :

Punitive damages are not necessarily non-dischargeable.

cfortunato :

What would the punitive damages be for? Was there any fraud or a misrepresentation involved?

Customer:

Gross negligence in driving and severly injuring a pedestrian. Should I add a specific language to the jury charge to make it non-discahrgable in BK?

Customer:

no alchohol involved

cfortunato :

You would be able to have the punitive damages determined to be non-dischargeable if it can be determined that the defendant caused ''willful and malicious injury'' to the plaintiff.

cfortunato :

For the facts you provided, ''willful and malicious injury'' is the key phrase that you would want included in the judgment papers.

Customer:

yes - thsi is what I thought - so if I add this "language" to jury charge instructions -- then this should do --right?

cfortunato :

Yes.

cfortunato :

For the rest of your question -

cfortunato :

If the deep pocket defendant pays the judgment, the deep pocket defendant can then sue the shallow pocket defendant for his share of the judgment.

cfortunato :

This judgment would then be on the shallow pocket defendant's credit report until it is paid, but the original judgment would be removed if the deep pocket defendant pays it.

Customer:

yes -- I understand - but most likely the deep pocket will not enforce the cross-claims against the shallow pocket. If the judgment removed - would it stil affect the shaloow pocket credit rating etc

cfortunato :

In other words, if the deep pocket (DP) pays the original judgment in full, then the shallow pocket (SP) will also benefit - because the fact that the DP alone paid the judgment will not show up on the SP's credit report.

cfortunato :

Once the judgment is paid - regardless of who pays it - that judgment gets removed from the credit report, and it will no longer has an effect on the SP's credit report.

Customer:

I see. In case there is a unpaid judgement against SP. What is worst for the SP -- to have a large outstanding judgment (the plaintiff would just sit on it till the defendant may "come into money") or for the defendant self-declare a BK to wipe out this judgment before the plaintiff would try to enforce it.

Customer:

Also with regards XXXXX XXXXX defendant having a PUNITIVE record -- does the fact that this is a PUNITIVE judgment (whether paid or unpaid or just partialy paid) - can this affect ability of the defendant to do get employment od do business, etc?

Customer:

I also understand that any punitive damages do not fall under joint -several liability - and the SP must pay for this type of the damages.

Customer:

Also I remeber that I had a small judgment against me regarding the hospital bill dispute -- and I beleive I could see it on my credict for several years after I paid it.

cfortunato :

The fact that the judgment remained on your credit report means no one notified the credit bureau that it was paid. Satisfying judgments is something credit bureaus are not automatically notified about - in the same manner as judgments are. The judgment creditor or the judgment debtor must notify the credit bureau(s) the judgment has been satisfied. Once notified, the credit bureau(s) must remove the judgment.

cfortunato :

Credit reports do not include the type of judgment . The fact that the judgment is for punitive damages will not show up on the credit report.

Customer:

thank you on the last part -- would you please look at my earlier questions from 7:30 to 7;33 PM

cfortunato :

However, having the judgment on his credit report will result in a low credit score. Many employers do check credit reports before hiring applicants, and they are allowed to not hire someone because of a poor credit report.

cfortunato :

In what section are those questions?

cfortunato :

I just checked you other questions.

cfortunato :

I don't see any that were not answered.

Customer:

OK let me just ask again. It is in the string above. What is worst for SP to have outstanding judgment (which plaintiff can enforce at any time in the futire when the defendant may come "into money" -- and in NY it is 20 years after the original judgement) or for SP self-declare a BK?

Customer:

Is the fact that it is PUNITIVE damages judgemnet and not regular judgment -- would it affect the SP more in terms of getting employment, doing business etc

cfortunato :

1) If the punitive damages award specifies the award is based on a "willful and malicious injury" to the plaintiff, then the SP would be better off filing a Bankruptcy. If the punitive damages award does not specify the award is based on '''willful and malicious injury'' to the plaintiff, then filing a Bankruptcy will not have an affect on the SP's punitive damages judment.

cfortunato :

A Bankruptcy is more damaging to one's credit report than a judgment.

cfortunato :

But a Bankruptcy remains on one's credit report for only 10 years - vs. 20 years for a judgment.

cfortunato :

The employer will not know the judgment is for punitive damages.

cfortunato :

Unless the employer gets a copy of the judgement - which is not normally done.

Customer:

so the defendant might be better off doing nothing and hoping that I will not start enforcing the judgment -- and the issue may just go away - rather then preemptively filing for BK. As you rightfuly pointed out though the judgment would stay for 20 years plus 10 year of additional BK if Istart enforcing at the end of 20 years? Do you know if the judgement can be extended beyond 20 years?

cfortunato :

No - a NY judgment cannot be renewed once it expires. So, after 20 years there would be no need for the SP to file a Bankruptcy after 20 years, as the judgment would then be unenforceable.

Customer:

would the employer or credit bureau know the amount of the judgment?

Customer:

In case it is dismissed in BK -- would the credit bureau or employer know what the amount of the judgment was prior to the BK?

cfortunato :

Yes - the judgment amount will show up on the credit report. But if the judgment is discharged in Bankruptcy, the judgment and the amount are both removed.

cfortunato :

So, the credit bureau and a potential employer will not know about the judgment and will not know about the judgment amount if the judgment is discharged in a Bankruptcy.

Customer:

thank you very much for your help

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you

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