Giuliani's bankruptcy does not prevent him from having to pay damages in defamation case

Former New York City Mayor Rudy Giuliani filed for bankruptcy on Dec. 21, just days after being ordered to pay $148 million to two former Georgia election workers he defamed following the 2020 election.

The workers, Wandrea “Shaye” Moss and her mother, Ruby Freeman, filed the civil lawsuit against Giuliani in 2021, saying Giuliani’s targeting of them after Trump narrowly lost Georgia to Democrat Joe Biden led to death threats that made them fear for their lives. A district judge in Washington, D.C., ruled in favor of Moss and Freeman on Dec. 15 and ordered Giuliani to immediately begin paying the debt.

Following the news of his bankruptcy filing, some people online wondered if the election workers would actually get paid.

THE QUESTION

Does Giuliani's bankruptcy prevent him from having to pay the civil damages in the defamation case?  

THE SOURCES

• U.S. bankruptcy code
• Blog post from Michael Jay Berger, a bankruptcy lawyer based out of Beverly Hills, California
• Barbara McQuade, law professor at University of Michigan’s Michigan Law
• Court record review of Freeman et al. v. Giuliani via PACER

THE ANSWER

No, Giuliani's bankruptcy does not prevent him from having to pay damages in the defamation case. 

WHAT WE FOUND

In his bankruptcy filing, Giuliani listed nearly $153 million in existing or potential debts, including almost $1 million in tax liabilities, money he owes lawyers and many millions of dollars in potential legal judgments in lawsuits against him. He estimated he had assets in the range of $1 million to $10 million.

While filing for bankruptcy may relieve some of his financial burdens, the civil damages owed to Moss and Freeman will not be able to be discharged in his bankruptcy. That is because U.S. bankruptcy law does not allow for the dissolution of debts that come from a “willful and malicious injury” inflicted on someone else, the law says. 

Barbara McQuade, a law professor at University of Michigan’s Michigan Law, told VERIFY in an email that in Giuliani’s defamation case, the courts have already determined that he willfully and maliciously defamed Moss and Freeman. He will be unable to hide behind bankruptcy to avoid paying the civil damages, McQuade said.

According to a blog post from Michael Jay Berger, a bankruptcy lawyer based out of Beverly Hills, California, “willful” means that a person intended to inflict the injury or engaged in conduct they knew was likely to cause injury. “Malicious” means an act is done without just cause or excuse, even if it is not motivated by ill will, Berger wrote.

Beryl A. Howell, the district judge presiding over the defamation case against Giuliani, is the one who issued the order confirming he will have to pay regardless of whether he filed for bankruptcy.

“It is further DECLARED that [Giuliani's] conduct was intentional, malicious, wanton, and willful, such that plaintiffs are entitled to punitive damages,” the order said. 

If Giuliani isn’t able to pay monetary damages, the courts could go after his assets in order to pay Moss and Freeman, McQuade told VERIFY. 

“They may attach his assets, such as bank accounts and real estate, and may garnish any earnings that come in. They will be able to chase him for every penny until the day he dies,” McQuade told VERIFY. 

Giuliani is expected to appeal the verdicts in the case. He can appeal the overall verdict, including the amount owed or settled, and also the finding that his acts were “willful and malicious.” 

This story will be updated with any developments.

The Associated Press contributed to this report.