If you’re in the midst of a personal injury suit and find that you need to file for bankruptcy, you need to know exactly how it might affect your case. While it’s inevitable that injuries and bankruptcy sometimes go hand-in-hand, bankruptcy filings can have a dramatic negative effect on your other suit. Read on to learn more.
How the Plaintiff of a Personal Injury Case can be Affected by Bankruptcy Filings
If you’re involved in a personal injury case as a plaintiff and you file for bankruptcy, here’s how the bankruptcy 
proceedings could affect your case:
- All of your property could be relinquished to the control of the bankruptcy trustee on your case
- In a Chapter 7 bankruptcy case, any property you own that is named non-exempt will be sold and the funds will be distributed to the creditors to whom you owe money
- In a Chapter 13 bankruptcy case, any money won from a personal injury suit will go straight to your chapter 13 bankruptcy plan. This means that you will not be able to collect the funds from your judgment personally and that control of the funds will return to you only when the trustee relinquishes control of it.
How Bankruptcy Filings Affect the defendant in a Personal Injury Case
- If you’re the defendant in a personal injury case and you file for bankruptcy, you may not be required to pay the debt owed. This is under the condition that the debt is fully dischargeable.
- As a general rule, all proceedings of the lawsuit must stop while you work out your bankruptcy proceedings
- After the bankruptcy proceedings are over, the personal injury case will resume, and the other party can expect to get the maximum funds your insurance company will pay, but nothing more.
Disclosure is Key
Regardless of whether you’re the defendant or the plaintiff in a personal injury case, it’s critical to disclose any bankruptcy proceedings to your lawyer. Since bankruptcy could have such a large effect on the outcome of an injury suit, it’s essential to make the proceedings known as soon as possible. This allows your lawyer to help you develop a strategy for moving forward with the personal injury suit, even in light of the bankruptcy proceedings and prevents you from losing the privilege of continuing the other suit.
Hire a Skilled Fort Worth Bankruptcy Attorney for Your Case
When it comes time to file for bankruptcy or have a personal injury case, you’ll need a skilled Dallas-Fort Worth attorney to help with your case. Having a skilled lawyer can help ensure your case stays on track and that you get the maximum benefit possible from your suit. When it comes to bankruptcy and personal injury, there’s no better attorney than David Kohm. An experienced personal injury attorney and bankruptcy lawyer, David Kohm will help you organize your suit. Contact David S. Kohm & Associates today to learn more.
