Attorney Ben Schwartz answers a viewer’s question, “can I file bankruptcy if I have a personal injury case?”
Hi, I’m Attorney Ben Schwartz,
Today I am going to answer a question from Jennifer in Laurel, Delaware. Jennifer wrote in and she said, “If I am injured in a car accident and I am pursuing a personal injury case, and then I file for bankruptcy, can I still have a personal injury case?” I guess my answer to that is yes and no. If you are engaged in litigation in a personal injury case or you have had a car accident and you are going to go to an attorney to pursue a claim against the at-fault driver if you then are going to file bankruptcy that may present a problem.
It is something that you need to talk about with your personal injury attorney and it is also something you need to talk about with your bankruptcy attorney and here is why. When you file bankruptcy like conceptually, the idea is that all of your assets and all of your debts become the responsibility of the bankruptcy trustee. There is a person, the trustee in bankruptcy, who takes all of your assets and money and everything you have and all of your debts, all the money that you owe to creditors, all the money you may owe a company and other people and uses those assets to pay off the debts to the best extent they can.
When you file bankruptcy, if you have a personal injury case or the expectation of a settlement or award, this is an asset that becomes the property of the bankruptcy trustee. Once you file a petition in bankruptcy, that case is not really your case anymore, now it is the bankruptcy trustee’s case. So Jennifer, if you are thinking about doing this, I am not saying this to discourage you. I am not saying do not do this. This is not legal advice at all, but my practical advice is, you need to talk to your personal injury attorney. Let him know you are considering doing this. You need to talk to your bankruptcy attorney before you file and let them know that one of the things that you have as an asset is a personal injury claim against the at-fault driver so your attorneys can advise you and make sure that your legal interests are best protected through the process. It is something you have got to talk to these folks about.
I am Attorney Ben Schwartz and this was a very insightful question and I appreciate you asking it. If you are watching this video and you have questions for me, leave a comment on the video or send me an e-mail below. Thanks for watching!