Many people who have suffered an injury in an accident, slip and fall, or other unfortunate event have difficulty paying their regular bills due to loss of work or the additional payment of medical bills. Sometimes this can force you to contemplate bankruptcy, even if you hope to receive proceeds from a pending personal injury suit.

But before you file for bankruptcy you should consider the impact of a personal injury settlement on your bankruptcy. Because any settlement is an asset, it is both possible and likely that the bankruptcy trustee would take the settlement in order to distribute it to your creditors.

Even if you haven’t filed suit yet, one of the questions that the bankruptcy trustee will ask at the §341 Creditor’s Meeting is whether or not you have any claims for personal injury against anyone, or any potential claims. If you lie to the trustee and later receive a settlement, your bankruptcy case could be dismissed and any discharge revoked.

If you are contemplating bankruptcy you should consult with an attorney and disclose any potential law suits such as personal injury claims. This will ensure that you are provided with a complete and appropriate evaluation as to whether or not you should file for bankruptcy and what might happen to any potential personal injury settlements.

Kelsey & Trask, P.C. offers a free one hour initial consultation to help evaluate potential bankruptcy and/or debt negotiation options. Click here to schedule a Free 1-Hour Initial Consultation.