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IN RE JOHNSON.

Discharge of Debts — Provability — Costs — Personal Injury Action

HILGENDORF, Bankruptcy Judge

Costs assessed against a bankrupt as a plaintiff in a state court personal injury suit are not provable under Section 63a (2) and therefore are nondischargeable under Section 17a.

The bankrupt was ordered by a state court in which she was the plaintiff in a personal injury action to pay costs for failing to appear for a jury trial on the date scheduled. The order provided that the plaintiff's action would be dismissed if the costs were not paid by December 31, 1977. Instead of paying the costs, a voluntary petition in bankruptcy was filed and the bankrupt obtained a temporary restraining order enjoining the dismissal of the state court action. The creditor then filed a complaint to determine the dischargeability of the debt.

To be dischargeable a debt must be provable under Section 63 of the Bankruptcy Act. Subsection (2) of Section 63a provides that: "costs taxable against a bankrupt who was at the time of the filing of the petition by or against him plaintiff in a cause of action which would pass to the trustee and which the trustee declines to prosecute after notice . . ." are a provable debt. However, in Wisconsin the law is well-established that a cause of action for personal injuries does not go to a trustee in bankruptcy under Section 70a(5). Therefore an essential condition of Section 63(a)(2) is not met and the debt for costs is not provable and therefore not dischargeable. The court further noted that since the bankrupt and not her creditors will have the benefits from the personal injury action, as a matter of equity the bankrupt should pay the costs imposed by the state court. See Sec. 17a [§ 523] at ¶ 9226, Sec. 63a(2) at ¶ 2614, and Sec. 70a(5) at ¶ 2684.

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IN RE JOHNSON, (E.D.Wis. 1978)
(Dec 12, 1978)