What the Shilo Sanders Bankruptcy Case Teaches About §523(a)(6) Discharge Exceptions

High‑profile sports disputes often make headlines, but they also reveal straightforward bankruptcy principles. In the recent USA Today coverage of the Shilo Sanders Chapter 7 case, I was quoted explaining the issues in his case, and the  Bankruptcy Code’s strict limits on what debt can be discharged. This includes the latest article on the rarity of bankruptcy trials.

For practitioners, debtors, and creditors alike, the case highlights the severe, long-term legal consequences of failing to defend a civil lawsuit and attempting to use bankruptcy as a retroactive reset button.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways for Debtors and Practitioners

• Never Default in Civil Court: A bankruptcy filing cannot easily undo the damage of a forfeited state-court trial. Defending the original liability is always preferable to litigating dischargeability under a cloud of default.
• Discharge Exceptions: Intentional torts, fraud, and breach-of-fiduciary-duty claims routinely survive Chapter 7 under §523.
• The § 523(a)(6) Intent Standard: Non-dischargeability under this section requires proving both a deliberate intent to cause injury, separating intentional torts from ordinary negligence.
• Negligence vs. Intentional Acts: While standard negligence judgments, such as those arising from typical motor vehicle accidents, can be successfully wiped out in Chapter 7, deliberate actions transform those liabilities into permanent, non-dischargeable debts.

The Danger of the Default Judgment

The foundation of the Sanders bankruptcy case traces back to a 2015 altercation with the school security guard that resulted in a civil lawsuit. While Sanders has consistently maintained that the incident involved self-defense, the critical procedural failure occurred years later: when the case finally proceeded to a civil trial in Texas, Sanders failed to appear.

In civil litigation, walking away from a trial date is catastrophic. Without a defense presentation, the court accepted the plaintiff’s evidence unopposed and entered a staggering $11.89 million default judgment. But unfortunately, default judgments are more common than you think. A recent article on Bankruptcy.blog focused on a Pew Research Study that concluded that 70% of cases end in default.

A default judgment doesn’t carry the same weight in Chapter 7 as a fully litigated verdict, but it puts the debtor at a major disadvantage. Once they file for bankruptcy, they face an uphill fight to re‑argue factual issues they already gave up by not defending the original case.

The Bankruptcy Issue: Willful and Malicious Injury

The central question in the upcoming Sanders’ bankruptcy trial is whether that $11.89 million debt can be legally discharged. Generally, Chapter 7 provides a fresh start by wiping out unsecured liabilities. However, Congress carved out an exception under 11 U.S.C. §523(a) to prevent debtors from escaping liabilities born of intentional wrongdoing.

Specifically, §523(a)(6) excepts from discharge any debt: “for willful and malicious injury by the debtor to another entity or to the property of another entity.”

To successfully block a discharge under this section, a creditor must prove:

Willful (Intentional): The debtor must have intended the injury (not just intentional conduct that resulted in injury).

Malicious: The act must be targeted at the creditor, done consciously and without just cause or excuse, even in the absence of personal hatred or ill will.

If the bankruptcy court determines that the conduct underlying the default judgment meets this high standard of willful and malicious injury, the multi-million-dollar debt survives the bankruptcy filing entirely. It remains a permanent personal liability that cannot be wiped away.

I often explain to students willful and malicious this way: a car accident, even one causing severe injury, is still an accident. That’s negligence, and a negligence judgment can be wiped out in bankruptcy. Bankruptcy can even restore a suspended driver’s license when accident damages exceed insurance limits.

But change one fact: the driver intentionally hits the other car. Once the act is deliberate, the debt is no longer dischargeable. Intent turns a dischargeable accident into a nondischargeable willful injury.

Conclusion

The Sanders’ bankruptcy is more than a headline; it’s a real‑world example of how federal bankruptcy law treats intentional‑injury claims, default judgments, and the limits of a Chapter 7 discharge.

When a debtor skips a civil trial, the consequences follow them into bankruptcy, where the burden shifts dramatically, and the factual record is already stacked against them. Section 523(a)(6) exists precisely for cases like this: where the court must decide whether the underlying conduct was an accident, negligence, or a willful and malicious act that survives bankruptcy entirely.

As the adversary trial unfolds, the lesson is straightforward: bankruptcy offers powerful relief, but it does not erase intentional wrongdoing or cure the damage caused by abandoning a civil lawsuit.

Bankruptcy Code References

• 11 U.S. Code §523 – Exceptions to discharge.