Bankruptcy and Your Indiana Personal Injury Case

           Through my practice as a bankruptcy and personal injury lawyer at Halcomb Singler, LLP, in Carmel, Indiana, I have had the opportunity to see a personal injury result in an individual or couple needing to file for bankruptcy.  Unfortunately, this is not uncommon because a personal injury often prevents the injured party from going to work while at the same time increasing medical expenses.  Since personal injury cases can take a few years to either settle or come to trial, the injured party may find him or herself being sued by medical providers due to unpaid medical bills as a result of the accident.  Often, at this time the advice of a bankruptcy attorney is sought.

          When an individual or married couple file bankruptcy their property, including a claim against any third party for personal injury, must be disclosed to the Court.  Failure to do so would likely result in the dismissal of the bankruptcy case and possibly federal criminal charges.  The Bankruptcy Code through section 541 defines property of the bankruptcy estate broadly.  Generally, it states that, with a few exceptions, everything that you own or have claim to on the date of the filing of your bankruptcy petition is legally owned by your bankruptcy estate as soon as you file for bankruptcy.  This means that if a person files a bankruptcy petition prior to obtaining funds through settlement or judgment in their personal injury case that the bankruptcy estate is the legal owner of this claim and that the trustee may take the funds to pay your creditors.  Unfortunately, in Indiana there is no exemption for funds received in a personal injury lawsuit (as exists in some states).  Therefore, it is possible that a debtor could lose their entire personal injury settlement.

           The bottom line is that it if you have been involved in a car accident and the medical bills from that accident are causing you serious financial distress it still may not be a good idea to file for bankruptcy until you have received your settlement.  Perhaps your settlement may be significant enough to pay all of your creditors and then some.  Perhaps your settlement will not be enough to pay your creditors and you will still need to file for bankruptcy.  Only a qualified bankruptcy attorney can help you to determine whether the filing a bankruptcy petition prior to the settlement of your personal injury claim is a good idea.  I do offer a free consultation to those considering bankruptcy where we can discuss whether bankruptcy would be of benefit to you or your family.  Just call me at (317) 575-8222 or click here to contact Halcomb Singler, LLP.  

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.