Personal injury claims and effects on Bankruptcy filing
One of the questions a bankruptcy trustee usually asks during their examination of the debtor is “Does anyone owe you money or is there any money you believe you are entitled to?” The answer to this question would be “yes” if the debtor has a personal injury case pending. Personal injury claims are usually pursued by attorneys on a contingent fee basis, meaning the attorney gets paid a share of any amounts recovered. Potentially, an injured party might not get any money from a claim even after filing suit. However, even claims considered to be in an initial settlement stage can have a monetary value. The attorney handling the claim would have at least a minimum value they believe the claim is worth in order to be working on it. The debtor’s bankruptcy attorney can list such a claim as a contingent, unliquidated (lacking a particular monetary value amount) claim of the debtor. The personal injury attorney can provide a statement for use by the bankruptcy attorney indicating the estimated value of such a claim. The bankruptcy trustee will then be aware that such a claim may in a matter of time result in a settlement/judgment awarded to the debtor’s estate. Discuss any claims you may have first with the personal injury attorney handling them and then clarify such a claim’s effect on a bankruptcy filing with a qualified bankruptcy attorney in your jurisdiction.
