Personal Injury Awards and Bankruptcy |
Posted: July 19, 2019 |
When an individual files a personal injury claim against the company or person that individual is able to acquire funding in order to pay for various issues and provide a means of finance in order to become whole when everything is complete. However, when a person is facing bankruptcy they may lose this award based on the type of chapter they are filing and what is exempt or will go to debt collectors to pay off bills and credit accounts. This article will discuss when personal injury awards are exempt from bankruptcy proceedings. Under normal circumstances of a general personal injury claim, the victim will have an exemption for the awards through chapter 7 and chapter 13. However, such awards may have a limit on how much is exempt. In the event that the person progressing through bankruptcy does not disclose the claim or is unsure how to protect the monetary assistance it is likely that he or she could lose it all to debt collectors. There are certain steps that a person needs to take in order to protect such funds even when proceeding into a bankruptcy chapter 7 for all debts or a reorganization of expenses with chapter 13 . If an individual sustains an injury as a result of a company, person, entity or organization; the individual may need to file a claim legally against the other party. Where eligible and all necessary factors are proven the individual may receive and acquire compensation by way of monetary awards in excess of bills he or she needs to pay. Monetary awards over-and-above medical bills and expenses may be where an individual sustains physical harm but suffers emotional or psychological trauma. One such example is pain and suffering which usually increases the award amount received. One article states, “Personal injury claims are similar to other assets the person must disclose for bankruptcy procedures such as a car, house or furniture that may provide money for debts. When pursuing bankruptcy through either a chapter 7 or 13 for a personal claim for debts, it is crucial to disclose everything relevant to the process. Any failure to do so could lead to a loss of any or all awards a person has an entitlement to or his or her own personal injury settlement. Even when the money is necessary for expenses, it will go directly to creditors when received.” The article further states that an individual’s failure to disclose monetary assets that may include a personal injury settlement received at the end of a claim can result in criminal liability. Therefore, the person must disclose such details at the date of injury or the date that the claim started rather than when receiving the award to ensure that the bankruptcy agency is aware of all the relevant factors. And this is despite the fact that the compensation will not transfer until the bankruptcy starts. For changes in the personal injury claim and to proceed cautiously it is crucial to hire a lawyer for each issue that is an attorney for car accident in Anchorage and a bankruptcy attorney.
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