When someone files for bankruptcy, their financial circumstances are typically under close legal scrutiny. If that same person has also been injured and is considering legal action, questions may arise about how personal injury claims fit into a bankruptcy case. This situation can be overwhelming, but having clarity on how these two legal paths intersect is important for making informed choices.
Below, our colleagues at Marsh | Rickard | Bryan, LLC highlight how timing, disclosure, and coordination between legal teams matter when managing both injury claims and bankruptcy proceedings.
Why Personal Injury Claims Still Matter
Even while dealing with bankruptcy, people who have suffered physical harm still have the right to file personal injury claims. A personal injury lawyer can help evaluate the facts of the accident and determine whether legal action is appropriate. Claims related to car crashes, falls, or other serious incidents may be eligible for compensation regardless of bankruptcy status. However, any potential settlement or award becomes part of the bankruptcy estate and must be disclosed properly. Working with a trusted lawyer is important to making sure that you receive the compensation that’s owed to you after an injury—without it being affected by your bankruptcy case.
Disclosure Is Not Optional
Failing to disclose an injury claim during bankruptcy proceedings can have serious consequences. Bankruptcy courts require full transparency. If a potential or active claim is not shared, the court may view it as an attempt to conceal assets. This can result in dismissal of the injury case, loss of compensation, or penalties during the bankruptcy process. Working closely with both a bankruptcy attorney and an injury lawyer helps avoid these complications.
Timing Can Affect Outcome
When the injury occurred and when the bankruptcy was filed can make a difference. If the injury happened before the bankruptcy filing, any potential compensation becomes part of the bankruptcy estate. This means the bankruptcy trustee may have control over the claim and how any awarded funds are distributed. If the injury happened after the filing date, the claim might fall outside of the estate and be handled separately.
In either case, communicating with a bodily injury lawyer about timelines and court procedures is important to avoid delays or missteps.
Coordination Between Legal Teams
Having your legal representation work together is key. A bankruptcy lawyer can provide insight into what the trustee will need, while a negligence lawyer can gather medical records, witness statements, and other documentation to build the injury case. If the two sides fail to coordinate, information could be lost or misunderstood, making the process more difficult for everyone involved.
Many clients benefit from hiring a firm experienced in both personal injury and bankruptcy matters—or at the very least, selecting attorneys willing to work collaboratively. Those who have experienced such a situation know that seamless communication can lead to better outcomes and less stress.
Work With A Firm That Best Fits Your Needs
Bankruptcy and injury cases are different, but they often overlap. Filing an injury claim during bankruptcy doesn’t mean forfeiting your right to seek damages—it just adds an extra layer of legal procedure. Being upfront with your attorneys and understanding the process will help you get through both with fewer complications.
If you’ve suffered an injury while involved in a bankruptcy case, don’t guess your way through it. Talk with a qualified attorney who can help you understand your rights and legal options. If you have questions, contact an attorney today.