
When you are injured due to the negligent actions of another person, it can be devastating, Not only are you in pain and suffering, but it can cause extreme financial hardship if you require medical care or must take time off work to heal. As such, you may receive a personal injury settlement against the negligent party for their actions. However, it’s imperative to understand that these funds could be at risk if you file for bankruptcy. The following blog explores what you should know about these issues and why working with a Memphis, TN consumer bankruptcy attorney is in your best interest.
Will My Personal Injury Settlement Be Impacted by Bankruptcy?
Whether you received a personal injury settlement before filing for bankruptcy or you were injured shortly after filing, it’s imperative to understand whether or not your settlement will be impacted. Generally, you must include your settlement as part of your bankruptcy filing.
When you file for Chapter 7 after receiving your bankruptcy settlement, it will be included as part of the filing. As such, if the settlement is too high, you may have to transition to a Chapter 13 filing. However, if you still qualify for Chapter 7, you may be able to utilize State and Federal exemptions to protect your settlement funds. There are different limits to how much you can protect so it’s important to consult with an experienced attorney to guide you through this complicated process.
Additionally, if you are in the middle of a bankruptcy filing when your personal injury case arises, you must disclose this fact to our bankruptcy trustee.
Failure to disclose a personal injury settlement at any point during bankruptcy can have negative impacts on the outcome of your case. For example, you may find that sanctions will be imposed against you and you may lose the right to pursue both bankruptcy and your personal injury settlement.
What Should I Do if I Want to File?
If you make the decision to pursue a bankruptcy filing, it’s imperative to understand that the most important thing you must do is consult with an experienced attorney who can help guide you through these difficult times. Your attorney can not only help you handle the complexities of filing, but they can also ensure you follow the rules so as not to impact the outcome of your claim. Additionally, they can help you examine your legal options to determine the best way to protect your settlement funds.
When you need experienced and competent legal representation, the team at the Arnold Law Firm can help. We understand how confusing it can be to navigate a personal injury claim and bankruptcy at the same time, which is why we are ready to assist you through these difficult matters. Contact us today to learn how we can help you.