Florida Personal Injury Lawsuits and Bankruptcy

Our Fort Lauderdalepersonal injury clients frequently have questions regarding how a potential bankruptcy filing could affect their motor vehicle, slip-and-fall, or medical malpractice lawsuit. The answer to these types of questions will depend upon a number of factors, including the type of bankruptcy protection a client is seeking from the bankruptcy courts. Typically, most clients file as consumers who request protection from the court by filing a Chapter 7 or 13 bankruptcy petition. Basically, consumers seek to liquidate their debts under Chapter 7 because they have no assets for the trustee to distribute to creditors, as compared to a Chapter 13. Under a Chapter 13, a payment plan is filed in the case in order to pay off creditors.

You will need to consult with your Fort Lauderdale personal injury lawyers about your concerns of an unresolved lawsuit and how a bankruptcy filing will affect your suit. Also, your attorney is likely to refer you to an attorney who practices bankruptcy law to represent you in your bankruptcy case. These matters can become very complicated because once a petition is filed, a bankruptcy trustee is appointed to administer your estate and you are required to list all property and assets you own.  And for bankruptcy purposes, any pending civil suits are considered as assets in which you own and must be listed in the bankruptcy schedules. Failing to disclose this information in your bankruptcy petition could result in a dismissal of your civil lawsuit to recover damages. Further, the trustee will determine whether or not the value of your pending lawsuit has a value which is worth administering. If the trustee determines that your pending claim has substantial value, then he or she will more than likely want to administer the personal injury case as an asset of the bankruptcy case.

But, before the trustee makes a decision to abandon its interest in a potential FortLauderdale personal injury suit, he or she will also consider any exemptions in which you are legally entitled to claim. Since bankruptcy is controlled by federal law, there are various federal exemptions in which you may claim to keep your property out of the hands of the bankruptcy trustee. For example, under Section 522 (d) (11) (b) of 11 U.S.C., a debtor (in this case, the plaintiff with a pending personal injury lawsuit) is allowed to exempt a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.  Also, there may be state exemptions under Florida law which will allow you to keep your property.

It is always best to speak with your Fort Lauderdale motor vehicle accident attorneys about any bankruptcy filing you may be contemplating once you have filed a cause of action based upon negligence, or any other areas of torts law. We know that when you or a loved one is seriously injured in a motor vehicle crash, a slip and fall accident, or harmed as a result of medical malpractice, you may face financial difficulties which arise as a result of the injury you sustained, and become unable to work. Consulting with an attorney can advise you of your legal rights and how to best handle your financial hardship.

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