Bankruptcy after personal injury

If you are expecting (or at least hoping for) a settlement in a personal injury case from a car accident or a slip-and-fall, etc., it won’t always prevent you from filing a bankruptcy case, if you need to do that as well.

The federal bankruptcy exemption list allows you to keep up to $15,000 in settlement funds if a personal injury case is settled after you file for bankruptcy. Keep in mind that this protects the amount that you actually collect, not portions used to pay a personal injury lawyer, or to pay outstanding medical bills.

If your share of the settlement is more than $15,000, the amount above that cap will go to the bankruptcy trustee, and ultimately, your creditors, as partial payment on your debts.

 

By Doug Beaton

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