What Our Kansas City Bankruptcy Attorney Thinks You Should Know
Sometimes good, hardworking people find themselves in difficult situations. Tough financial situations can follow unpredictable accidents that cause injuries, or vice-versa. However, you should not be afraid if you have to file for bankruptcy while going through a personal injury lawsuit. The right attorney can help you through bankruptcy and lawsuits.
The attorneys at Troppito Miller Griffin, LLC understand how to navigate bankruptcy law after an injury. This is why we have gathered some resources to help individuals facing financial struggles while dealing with a personal injury lawsuit. If you are considering bankruptcy or waiting for your case to settle, you may find the following information helpful.
What Kind of Bankruptcy Should I File?
Generally, people usually file Chapter 7 bankruptcy or Chapter 13 bankruptcy. The type of bankruptcy that can work best for you depends on your unique situation. For example, if you have an ongoing claim for a personal injury and are also considering bankruptcy, you should consider when the court may award you a settlement. Filing bankruptcy after a lawsuit can have an impact on your bankruptcy process.
There are many issues that can overlap between the types of bankruptcy, but the differences are:
- Chapter 7 Bankruptcy: As a rule, Chapter 7 bankruptcy wipes out most of your general debts, like medical bills and credit cards, without a repayment plan. For this reason, Chapter 7 works well for people with little or no assets. These cases take approximately 90-120 days to complete and are quicker than other forms of bankruptcy. If you expect a settlement soon, Chapter 7 may be the right choice under the right circumstances. However, you will need to make sure to disclose the lawsuit to the bankruptcy court.
- Chapter 13 Bankruptcy: Generally, Chapter 13 is a reorganization bankruptcy designed for people with regular income. These cases can take three to five years to complete. Chapter 13 bankruptcy can be more flexible as it may offer a minimal monthly payment at the beginning of your case and you might be able to keep some or all of the funds you receive from the personal injury settlement.
What Happens If I Fail to Disclose a Personal Injury During Bankruptcy?
Federal law requires you to disclose all of your assets when you file for bankruptcy. In addition, you can also make amendments and updates to your list of assets. For this reason, you should never hide your personal injury case. Otherwise, the courts could declare that you committed “failure to disclose.” If this happens, you can lose all the compensation you could recover in a personal injury lawsuit and your bankruptcy could be at risk.
Will Bankruptcy Affect My Personal Injury Claim?
If you suffered an injury, then you have a right to pursue damages in a personal injury claim. This is true whether or not you are considering filing or are in the middle of filing bankruptcy. However, the court and creditors must be aware of the claim. This will allow the court to properly determine what happens to any settlements awarded to you. For instance, some overlapping issues to consider involve:
- Settlement Details: Expect the bankruptcy court to inquire about your settlement amount. In the case of an unliquidated settlement, the judge may consult with your creditors to determine what part of the settlement is going toward paying your debts.
- Declare Personal Injury Claim as Property: Your bankruptcy petition must declare your claim as property.
What Are Debtors Duties in Bankruptcy?
A bankruptcy estate is established when you file a bankruptcy petition. This estate must include all equitable interest in property of any kind, including personal injury claims. Your duty is to file a list of:
- Assets: Assets are the property you owe. This includes houses, vehicles, bank accounts, furniture, electronics, clothing, retirement/investment accounts, personal injury claims, and any and all property you own.
- Liabilities: Liabilities are the creditors to whom you owe money. Liabilities refer to who is directly responsible for an obligation and all liabilities must be listed.
- Exemptions: Exemptions are used to protect the property you own. Depending on your circumstances, you can list certain property as exempt. After a careful review with a legal professional, you can determine how you can use exemption definitions and your personal injury settlement to your best advantage.
Do I Have to Pay My Creditors with My Personal Injury Settlement?
When you file for bankruptcy, your personal injury claim becomes a part of your bankruptcy estate. This means the bankruptcy trustee becomes the owner of the estate. He or she will represent your creditors and make decisions about how to divide that estate. Since the trustee can pursue personal injury litigation on your behalf, the bankruptcy judge must approve settlements. This is why hiring an experienced bankruptcy attorney is so important when you a pursuing a personal injury claim while filing for bankruptcy.
An experienced attorney is familiar with trustee policies, which may help with negotiating your share of the lawsuit. A bankruptcy lawyer can also help you claim any exemptions that you may have.
Questions About Bankruptcy and Lawsuits? Contact Us Today
Are you struggling with debt and expecting a personal injury settlement? Have questions about how to move forward to protect your best interests and mitigate risk? No one should have to struggle due to unforeseen life events. Rely on the protections afforded to you under bankruptcy law.
At Troppito Miller Griffin, LLC, our attorneys have experience with both personal injury lawsuits and bankruptcy. We can handle the complicated situation of handling both bankruptcy and lawsuits. Rely on Attorney Ryan D. Kiliany to help you settle your debts and restart your financial life. Call (816) 221-6006 or fill out one of our confidential online contact forms.