How Filing for Bankruptcy Can Affect Your Personal Injury Claim
How Will Bankruptcy Affect My Personal Injury Case? If 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.Can I still file a claim?The fact is, if you have been injured in an Oregon automobile accident, or when you werecycling or simply walking across the street, you can still pursue damages in a personal injurycase, whether or not you have filed for bankruptcy. The real question is what will happen to anydamages you receive in the event of a successful claim being made. As a general rule, and bearing inmind that a number of exemptions and exceptions exist, the following will apply to your personalinjury claim in conjunction with your bankruptcy claim: • The bankruptcy court will enquire 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.ExemptionsA number of exemptions to the above rules also apply to a personal injury claim in Oregon made bysomeone 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. • Personal injury damages of up to $20,200 will not be subject to bankruptcy laws if you opt for federal exemptions.
• Damages for pain and suffering are not exempt and will be included as part of your bankruptcy estate to pay creditors.What really matters when filing a personal injury claim in Oregon is when the injury occurred, notwhen the lawsuit is filed. In other words, if you were injured in an accident yesterday and file forbankruptcy today, then file a personal injury lawsuit tomorrow, the bankruptcy estate owns yourrights to recover for those injuries, because you filed the lawsuit after filing for bankruptcy.The best advice is to keep your personal injury attorney fully up to date if you are considering filingfor bankruptcy. Once they know what’s happening, they can do their best to protect your presentand future financial interests.What if someone is suing me, and I’m filing for bankruptcy?Let’s say the situation is reversed. You’re the person who is being sued in a personal injury lawsuit. Itcouldn’t have come at a worse time, because you’ve just made the decision to file for bankruptcy.What now?Once again, the key is communication. It’s critical to let your attorney and the courts knowthat you have initiated bankruptcy proceedings. Under normal circumstances, you may beexempt from paying damages if you have filed for bankruptcy, but any of the following couldapply: • The plaintiff may attempt to find relief and continue to prosecute the case even during the bankruptcy proceedings. • The plaintiff may wait it out until your bankruptcy case is finished, then re-start proceedings against you. This tactic has been known to backfire and such lawsuits may be dismissed in their entirety. • The plaintiff could attempt to move their injury lawsuit to the bankruptcy court.In some cases, the person claiming bankruptcy could file a counter-claim against the plaintiff. It’s notunusual for two parties to be held at least partially liable in a personal injury claim in Oregon. Incertain instances, you could actually win your counter-claim and the plaintiff’s claim could bedismissed, leaving you with a positive cash settlement, even though you didn’t bring the originalclaim.Clearly, this is a complicated area. Filing for bankruptcy can certainly have implications for a personalinjury claim in Oregon, but should not prevent you from filing a personal injury lawsuit if you’ve beeninjured through someone else’s negligence. By the same token, if you’re the person who is beingsued, and you are thinking of filing for bankruptcy, you may be protected from having to pay out alarge settlement. In either case, the key to protecting yourself is keeping your Portland personalinjury lawyer fully informed at all times as to the status of your bankruptcy proceedings. An
experienced attorney will have your best financial interests at heart, and they can show you how toget through a personal injury claim in the most satisfactory way for all concerned.