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Personal Injury Claims & Bankruptcy

In so many bankruptcy cases the reason someone is filing is because of a job loss or temporary unemployment due to a medical issue.  Sometimes this job loss or temporary unemployment arises out of a car accident or injury that has a personal injury action pending.

I cannot count the number of times that someone has told me “If my lawsuit would just settle, I would be fine.”  Except the lawsuit hasn’t closed up and the people sitting across the table from me are really hurting financially.

“Will I lose my personal injury settlement if I file bankruptcy?”

The answer (just like every other answer in the law): It depends.

A personal injury settlement can be protected up to a certain amount of money with its own exemption and any excess can be protected with leftover wildcard exemption.  This means that the projected settlement amount is going to be key. We will be able to protect some of it, maybe even all of it in some settlements, but if you have a fairly large settlement coming at your from a personal injury case some or all of your creditors may get paid as well with our office protecting as much as we can.  Bottom line: We can protect some money for you even when you are going to have to pay some of it to your creditors.

Chapter 7 vs. Chapter 13

There is a bit of strategy involved in whether you should file a Chapter 7 or a Chapter 13 case so it is important that you hire an experienced bankruptcy attorney to go over how you want to handle your settlement in relation to the bankruptcy and what you hope to accomplish in the bankruptcy case.  This will be a big factor in what type of bankruptcy case is filed for you and how you we advise you.  It is hard to go over why I would choose one type over another as this is generally determined on a case by case basis.   Believe me.  If you come into my office and have a potential personal injury claim we will go over which is the better route for you.

“But my cousin filed with a personal injury suit and she didn’t have to do ……”

I know.   No two bankruptcy cases are the same.  Your cousin who had a lawsuit could have filed a bankruptcy case with my office and I may have approached the case completely differently because the facts were different and the goals were different.  So don’t be surprised when I want to have a nice long chat about your claim and maybe handle things differently.

Interested in how we can help you with your bankruptcy and your personal injury claim? Give our office a call at 732-302-9600 or fill out our online consultation form and we will call you!