Bankruptcy is a very difficult situation to face. According to Debt.org, in 1980, businesses filed 13% of bankruptcy claims; however, businesses only account for 3% of today's bankruptcy filings, and consumers are filing for bankruptcy more often than businesses. What happens if a consumer files for bankruptcy while also filing a personal injury claim? Read on to learn more.

It Depends on When the Injury Happened

According to our legal team, if you were injured first, then you're going to have to include that personal injury claim as an asset when you file for bankruptcy. Let's imagine you were injured in a car accident and the other driver was at fault. You would file the claim with support from a personal injury lawyer. Let's say while you're waiting for the process to end, your injuries keep you from working. Because you aren't working, this leads you to bankruptcy. You'd then have to list the claim on the bankruptcy form.

If you get hurt after you file the bankruptcy claim, you're still going to have to tell the bankruptcy court about it. The only time it's excluded is if you got hurt after filing for Chapter 7 bankruptcy. This is important information to remember.

It Depends on Who Files for Bankruptcy

Now we're going to flip the tables a bit. What if another party injured you, you hired a personal injury lawyer, and then the other party declared bankruptcy? According to our legal team, there is something called an automatic stay, which puts everything on hold. This can only be lifted by request. Their goal is to get the court to discharge the debt, which means that it's canceled.

Bankruptcy and personal injury can be difficult enough to understand as two separate entities. Combining the two can make people's heads practically spin. Don't let it do that to you. Always bring in experts to talk to you about what your options are. They are the ones who have been through it before and can help you get to the other side. They can make sure that you don't make any mistakes that could wind up costing you a lot. A personal injury settlement could be taken out of the bankruptcy decision, and you need to be prepared for that. As long as you get your health back, that's what matters.

Are you looking for a personal injury lawyer who can assist you even during a bankruptcy situation? Beebe & O'Neil can help. Our team has experience with both personal injury and bankruptcy cases. Contact us for more information.