What is a personal injury claim? If you have been hurt and it is not your fault, you might have a case where you could recover money for your pain and suffering. This could be from a car wreck, a fall, medical malpractice, or many other types of injuries you suffered. And if you have or are considering filing for bankruptcy and also have a pending personal injury claim, it’s very important that you talk to a skilled bankruptcy attorney to understand how your personal injury recovery could be affected.
When you declare bankruptcy, the Court assigns a “trustee” to oversee your case. Everything you own, including property, monies (whether cash on hand, inherited or an award from a divorce decree or through life insurance,) become the property of the bankruptcy “estate” and, depending on which chapter you file, can be sold to pay your creditors. Any existing personal injury claims must be disclosed to your trustee, who may have the right to take control of the injury claim and its potential assets, and may even replace the attorney you have hired for your personal injury case.
It’s important to understand that you are allowed some protections to keep some of your assets under the law; these protections are called “exemptions.” Your attorney can explain how these exemptions can be best used to protect your property interests. The bottom line: If you receive money from a personal injury lawsuit after filing for bankruptcy, some or all of the money could belong to your bankruptcy estate.
To best understand how you may be able to safeguard your personal injury recovery, consult with a skilled bankruptcy attorney such as our team here at Martin Attorneys.