When a debtor files for bankruptcy relief under Chapter 7 or Chapter 13, the debtor is required to disclose all assets. Claims for injuries including those arising from automobile accidents, slip and falls, dog bites, medical malpractice, and bad products may be considered as assets of a debtor’s bankruptcy.
Your bankruptcy attorney will list all of your assets and all necessary information in your bankruptcy petition that is filed with the court. Disclosing all your assets is necessary to ensure a bankruptcy discharge.
Personal Injury Cases in Chapter 7 Bankruptcy Versus Chapter 13 Bankruptcy
If a debtor’s personal injury claim arose prior to filing the Chapter 7 bankruptcy, the injury claim must be disclosed as an asset of the injured person’s bankruptcy case. If the injury claim arises after filing the Chapter 7 bankruptcy, it need not be disclosed and is not considered an asset.
If a debtor files a Chapter 13 bankruptcy in Springfield Missouri, any injury claim, including car wrecks, medical negligence claims, and premises liability claims, arising before or during the Chapter 13 bankruptcy case must be disclosed in the injured person’s bankruptcy. A qualified Chapter 13 bankruptcy attorney will be able to assist with properly disclosing the asset as well as any motions necessary to retain the funds.
What Happens When I Have an Injury Case and I File for Bankruptcy Relief?
Upon filing a bankruptcy case, an injury claim becomes property of the bankruptcy estate. At that point, the trustee stands in the shoes of the injured plaintiff and has the authority to pursue damages in the injury case. In other words, the trustee has the authority to continue negotiations for settlement and continue litigation in the debtor’s injury case. Even if the injured person does not wish to pursue the case, the trustee has the right to pursue the claim on behalf of the injured person.
Will I Be Able to Keep My Settlement If I File Bankruptcy?
Even though a debtor’s injury claim becomes an asset of the debtor’s bankruptcy, the injured debtor may still receive money from the claim. An injury settlement, judgment, or verdict may be protected with exemptions provided by the law. As each bankruptcy case is different it is important to have an experienced bankruptcy attorney who fully understands the intersection of personal injury law and bankruptcy.
If You Have Been Injured, How Do You Protect Your Injury Settlement or Award?
If you are injured due to the negligence of an individual or corporation, it is important to inform your bankruptcy attorney about your injury case. Failure to do so may jeopardize your ability to receive a settlement, verdict, or award for your medical expenses, wage loss, or other damages. Furthermore, failure to disclose your injury claim in your bankruptcy may expose you to criminal liability.
If you are considering bankruptcy and have an injury claim, speaking with a knowledgeable bankruptcy attorney is the first step in protecting any potential injury settlement.
At the Licata Bankruptcy Firm, we have both the knowledge and experience to assist debtors that find themselves with a personal injury claim and the need for bankruptcy. A free, no-obligation, consultation is the first step to understanding how a personal injury claim and settlement will be affected by a bankruptcy.