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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37819
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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In California can I discharge in bankruptcy a debt from an

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In California can I discharge in bankruptcy a debt from an unemployed employers fund who pays an injured employee?

If the fund was created by an order of the Cal. Workers Compensation Board, and there are no longer sufficient funds to pay for the employee's injuries, then the question in bankruptcy court would be whether or not the lack of funds is the result of an intentional breach of fiduciary duty on the part of the fund manager/employer (fraud, embezzlement, etc.).

If "yes," then the debt is not dischargeable in bankruptcy. If "no," then the debt is dischargeable.

Please let me know if I can clarify anything or provid further assistance.

Hope this helps.
Customer: replied 3 years ago.

I don't understand. The employer didn't have worker's compensation insurance. If the uef pays the employee can the employer discharge this in bankruptcy?

You meant the Uninsured Employers Benefits Trust Fund (UEBTF), didn't you?

I thought you were referring to some sort of private account that the employer set up to pay for employee injuries sustained during employment.

The UEBTF is a separate government trust fund. It has nothing to do with the employer. So, the answer is, "no," the obligation is not discharged, because it's not being paid for by the employer. It's being paid by the state fund.

Hope this helps.
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