Will Being in Bankruptcy Affect My Portland Personal Injury Case?

how will bankrupcty affect my personal injury claimIf you’re filing a personal injury claim in Oregon, and you have recently filed for bankruptcy, you should let your Portland personal injury attorney know from the very beginning that you have also filed for bankruptcy. This way, your personal injury lawyer can work with your bankruptcy lawyer to ensure you receive some of the money from your settlement.

Being in bankruptcy can have a serious impact on any settlements you may receive through a personal injury case. In bankruptcy, your claim does not belong to you; it ends up in the hands of your bankruptcy trustee – with a certain amount going to you and with the rest going to your creditors – which means you may not receive the majority of your claim. The above situation is not always the case, and there are plenty of exceptions to this. Being able to negotiate may help your outcome considerably.

If you are in bankruptcy and get into an accident, it is absolutely important to inform your bankruptcy lawyer or trustee of any impending claim. There is no way to fool them; their jobs entail finding these things out. To hide a personal injury claim from your lawyer or trustee is fraud, and as a result of this you would lose any money you won, your personal injury lawsuit could be thrown out of court, and you could go to jail.

Can I still file a claim? Or will bankruptcy affect my personal injury case too much to make it worth it?

The fact is, if you have been injured in an Oregon automobile accident, or when you were cycling, or simply walking across the street, you can still pursue damages in a personal injury case, whether or not you have filed for bankruptcy. The real question is what will happen to any damages you receive in the event of a successful claim being made. As a general rule, and bearing in mind that a number of exemptions and exceptions exist, the following will apply to your personal injury claim in conjunction with your bankruptcy claim:

  • The bankruptcy court will inquire as to the nature of your settlement, and how much of that settlement will go towards paying off your bankruptcy debts.
  • Your right to recover damages for personal injury is part of your estate.
  • Any money you recover will normally be used to help pay off your creditors.
  • If you do not claim your injury as “property” in your bankruptcy petition, you may be judicially stopped from bringing your personal injury lawsuit in the event you come out of bankruptcy.

Exemptions

A number of exemptions to the above rules also apply to a personal injury claim in Oregon made by someone who has also filed for bankruptcy. Those exemptions include:

  • Worker’s compensation claims. If you were injured at work and have made a worker’s compensation claim, your right to receive compensation is fully exempt from bankruptcy rules and regulations. You have the right to receive full compensation in worker’s compensation awards.
  • Your right to recover under laws that compensate victims of crime is likewise fully exempt from standard bankruptcy laws.
  • Damages for pain and suffering are not exempt and will be included as part of your bankruptcy estate to pay creditors.

The best advice is to keep your personal injury attorney fully up to date if you are considering filing for bankruptcy. Once they know what’s happening, they can do their best to protect your present and future financial interests.