What Happens If I File Bankruptcy During My Personal Injury Case?
I have a truck wreck case pending in Tennessee state court. My financial situation is bad and it looks like I have to file bankruptcy. What effect will that have on my personal injury case?
First, I urge you to talk to your personal injury lawyer before filing bankruptcy. This is essential.
Second, if you file bankruptcy you must list your pending lawsuit as an asset. Failure to do so will create a big problem for you. Then, you truck accident case lawyer must get approval of the bankruptcy trustee and the bankruptcy court to continue to represent you.
Third, the bankruptcy trustee and the bankruptcy court will have a large element of control over your case. The trustee will be involved in settlement negotiations or, at a minimum, have the right to reject and tentatively accept any offers in the case. The bankruptcy court will have to approve any settlement. There is a risk that the bankruptcy trustee and the bankruptcy judge will settle the case for an amount less than you would have otherwise settled the case for.
Fourth, the money in the settlement will go to the bankruptcy court to be used to pay the claims of your creditors.
This is just a brief statement of the impact of a bankruptcy filing at this time. There are other consequences to a bankruptcy filing not listed here. However, this should be enough information to let you know that filing bankruptcy is not something you should do lightly under any circumstances, and certainly not when you have a pending personal injury claim of any type.
So, the first line of my response is essential: talk to your personal injury lawyer before you talk to a bankruptcy lawyer. An experienced personal injury lawyer can guide you through all of the factors you should consider. He or she may wish to consult a bankruptcy lawyer for guidance. But, what ever you do, do not file bankruptcy without talking with your personal injury lawyer first.
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Are you a personal injury lawyer who came across this post? John Day writes a blog for personal injury and wrongful death lawyers called "Day on Torts." John handles personal injury and wrongful death cases of all types across Tennessee and can be contacted either here or by either of the forms to the immediate right of this post.
