Obtaining a settlement can be a time consuming process, and many find themselves burdened with debt while they wait. This leads some to seek bankruptcy relief. This is a stressful situation, and it is recommended that you contact a California personal injury attorney to aid you in the decision making process and help you get a fair settlement.
Disclose Your Personal Injury Claim In A Bankruptcy
Assets must be disclosed when you file for bankruptcy. If you were injured at the fault of another party and filed a claim against them for damages, it is likely that you will obtain financial award. Since there is potential to receive monies from the claim, it is considered an asset. Therefore, you must disclose your personal injury claim when you file for bankruptcy.
Why Does This Matter?
When you file for Chapter 7 Bankruptcy, most of your assets become the property of the bankruptcy estate. This includes both tangible and intangible assets. The ways in which those assets are used to pay your debts is decided by the bankruptcy trustee.
The difference when you file for Chapter 13 bankruptcy is that you will instead be asking to restructure your debt. This means that you'll be asking to repay your creditors a reduced amount over time.
When you obtain a settlement before or during the time of repayment, the settlement is included as assets to your bankruptcy estate.
Does That Mean I'll Lose My Settlement?
In California, there are exemptions that serve to protect personal injury settlements:
- 704.140 & 704.150 – Personal injury causes of action and wrongful death causes of action. Wrongful death and personal injury recoveries are needed for support.
- 703.140(b)(11) – Wrongful death recoveries are needed for support.
- 703.140(b) (11) – Personal injury recoveries up to $29,275.
Call Today, We'll Help You Make All The Right Decisions
Although there are protections in place for your personal injury settlement against your bankruptcy, many still aren't sure how to go about protecting their settlement and their rights. Call today or visit our website to request your free consultation. During this consultation, we'll review the unique circumstances of your case, and explain how we can serve you to obtain a fair settlement and protect it when possible, all at no cost! This settlement can help greatly with paying medical bills or recovering lost wages. The best way to feel assured that you are taking the right steps toward physical and financial recovery is to contact an experienced attorney, call today!