Can My Bankruptcy Impact My Personal Injury Case?
The purpose of allowing individuals the opportunity to file for bankruptcy has to do with allowing them a fresh start.
According to the Supreme Court, the unfortunate debtor is allowed “a new opportunity in life.” This was music to the ears of the 1,181,016 individuals and 40,075 businesses in the United States who filed for bankruptcy in 2012 alone.
Although there are many reasons that someone may file for bankruptcy, it is not uncommon that one reason is due to the financial burden of a personal injury. Unfortunately, for many individuals who have been injured, they are left with an inability to work and therefore lost wages, only compounding the overwhelm that comes with inordinately high medical bills – regardless of whether or not they have insurance. Once creditors come knocking, their only option is often to file for bankruptcy.
Filing for Bankruptcy Can Have an Impact
Sometimes bankruptcy really can be a saving grace. But it is still important to remember that filing for bankruptcy can have a real impact on your personal injury case.
If your personal injury attorney does not understand the ways in which filing for bankruptcy can affect your case, or does not know that you have filed at all, in some cases it could prevent you from recovering all together, leaving you responsible for all costs associated with your injuries despite someone else causing them.
The Bankruptcy Estate
When an attorney files a bankruptcy petition on your behalf, it then creates an estate. The estate includes all of your legal and equitable interests as of the date that it is filed. This includes claims that you have already brought as well as those that you have a right to bring in the future.
If an individual files for Chapter 13 bankruptcy, even property acquired after the case began but before it was completed, it could become a part of the bankruptcy estate. This even includes any injuries that you suffer after the filing of the petition.
The Requirement of “Standing”
To bring your personal injury claim in your name, you must first have standing. This means you must list any and all property (including any personal injuries, which you can list as exempt) in the schedules that your bankruptcy attorney provides and place an accurate value on them. The personal injury attorney will then make sure that your values are correct and then the trustee will either abandon the claim or rule it as exempt.
What Should You Do?
If you or a loved one has filed for bankruptcy before you were injured or as a result of your injury, it is important to find a knowledgeable and experienced personal injury attorney to help you to understand your options.
At Randall F. Rogers, PC we understand the importance of limiting your inconvenience and helping to minimize any future damages. To learn more or to schedule a free consultation, call us today!
Posted in: Personal Injury