In 2012 alone, 1,181,016 individuals and 40,075 businesses in the United States filed for bankruptcy. Bankruptcy serves to allow people to start over when they cannot remedy their situation. According to the Supreme Court, the unfortunate debtor is allowed “a new opportunity in life.”

Personal Injury Can Contribute to Bankruptcy

There are many different reasons why people choose to file for bankruptcy. One such reason is due to personal injuries and finances. When an individual experiences a personal injury, the financial burden of medical bills and work to fix vehicle damages is only compounded by an inability to work and subsequently lost wages. This can overwhelm just about anyone – even if they have good insurance. Often times when this happens and creditors come asking for money, the only option left is to file for bankruptcy.

Often the option of bankruptcy can be a savior. However, it is important to understand that filing for bankruptcy can impact your ongoing personal injury case. If you and your personal injury attorney do not understand how filing for bankruptcy can affect your case, or if your attorney does not know that you have already filed, you could end up responsible for all costs – despite true liability. 

Establishing All Legal and Equitable Interests

When your attorney files a bankruptcy petition for you, it will create an estate. This includes all legal and equitable interests as of the date of filing. This can include not only claims that you have already brought but also those that you are entitled to bring in the future. 

In fact, individuals who file for Chapter 13 bankruptcy can have property that was acquired during the course of the case become part of the estate. This may also include any injuries that you suffer after the filing of the petition. 

In order to bring a personal injury claim in your name, you must establish “standing.” In order to prove standing, you must list any and all property (including any personal injuries, which can be considered exempt) in the schedules provided by your bankruptcy attorney. You must provide an accurate value for all property. Next, the personal injury attorney will check that your values are correct before the bankruptcy trustee will either abandon the claim or rule it as exempt. 

What Can You Do?

If you or a loved one is considering filing for bankruptcy, it is important that you understand all of the potential implications that it can have on your life and whether bankruptcy is the best option in your current situation. To do so, it may be in your best interest to consult with a knowledgeable and experienced Ohio bankruptcy attorney. At Miami Valley Bankruptcy, we understand bankruptcy law and will help you to best navigate your situation. To learn more or to schedule a free consultation, contact us today!