If you’re filing for bankruptcy, no doubt you’re under an enormous amount of stress. You’re afraid of losing your home or belongings. The bankruptcy process is more than enough of a challenge to have on your plate, let alone if you’re dealing with a personal injury claim.
Unfortunately, sometimes life hits us with multiple misfortunes at once. If you’ve been in a car accident, slip and fall, or other personal injury incident and are also facing bankruptcy, you need dedicated legal counsel to help you navigate both situations and protect your financial security and property. Here, we’ll give an overview of how a simultaneous bankruptcy and personal injury claim works, and how we can help.
What Happens to a Personal Injury Claim When You File for Bankruptcy
If you’ve suffered a personal injury (PI) deserving compensation but are also considering bankruptcy, what will become of your PI settlement, should you secure one? Will you get to keep the proceeds? It depends largely on whether your injury occurred before or after you filed for bankruptcy.
If You File for Bankruptcy After the Injury
If you’re injured by another’s negligence and are either pursuing compensation or considering it, then file for bankruptcy, the PI claim will be considered an asset you must list in your bankruptcy paperwork. Even if you haven’t recovered damages or even tried to. You’ll have to list the settlement proceeds, uncollected judgment award, or potential claim as an asset, depending on where you are in the personal injury claim process.
Proceeds from your PI claim will likely go to repaying your debts for a Chapter 7 bankruptcy. For Chapter 13 bankruptcy, the proceeds may be included in your payment plan to creditors.
If You File for Bankruptcy Before the Injury
If you file for bankruptcy and then experience a personal injury, any claim proceeds won’t be used for a Chapter 7 bankruptcy. You’ll get to keep the settlement. But if you’re in an ongoing Chapter 13 bankruptcy, you must update your paperwork with the PI claim, which may then be applied to your payment plan.
Personal Injury Bankruptcy Exemptions
Even if your personal injury claim precedes your bankruptcy filing, some exemptions typically allow you to keep some of the PI awards. These exemptions vary by state. An experienced Washington lawyer can help you take advantage of these exemptions to maximize your proceeds.
Navigating a Personal Injury Claim and Bankruptcy
Personal injury claims and bankruptcy are not easy alone, let alone combined. If part of the reason you find yourself filing for bankruptcy is because of the medical bills and lost wages of a personal injury, it can seem even more disheartening. For both claims, you will be up against complicated legal requirements and extensive paperwork. In bankruptcy, you might be fighting to keep your home, and in a PI claim, you may be stuck negotiating with stingy insurance companies that want to minimize your damages.
Working with a Bankruptcy & Personal Injury Lawyer
This is not a scenario to face alone. Both bankruptcy and PI claims are most successful with legal counsel, especially when they happen together. At Integrity Law Group in Seattle, we work in both bankruptcy and personal injury cases. We have the experience you need to navigate both challenges and optimize the outcome.
Whether you’re in the midst of both claims or facing both but don’t know where to start, we can help. For bankruptcy, we can help you file and navigate the path to financial freedom without losing your property. For a personal injury, we can help you pursue the compensation you deserve, negotiating with insurance companies on your behalf and representing you in court if necessary.
Schedule a Consultation Today
Everyone deserves a chance at financial freedom. Everyone deserves compensation if they’ve been wrongfully injured. Integrity Law Group is here to help you achieve both, with experience and dedication you can count on. Contact us today to schedule a consultation for your personal injury claim, bankruptcy filing, or both.