Can You File for Bankruptcy with a Pending Car Accident Claim?

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Our law firm does not handle bankruptcy cases.  We had a lawyer that we refer our clients to if they have questions about bankruptcy.  So this post is in general terms; you want a bankruptcy lawyer to evaluate the specifics of any particular case.

But this we can say.  Generally, car accident claims are exempted in bankruptcy.  The key is to make sure you disclose the pending claim as property in the bankruptcy.  This puts the onus on the trustee.  If the trustee does not timely object to the exemption claim, then the exemption should be allowed.  

The most used exemption is the personal injury exemption of $21,625 from a personal injury award or settlement, not including pain and suffering or compensation for monetary losses. 

The biggest thing that can screw you up based on my limited experience with bankruptcy seeking clients is bad communication between the acci
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dent lawyer and the bankruptcy lawyer.  If they don't know each other and have not worked together, the client may have to be the facilitator between the two. Conversely,  many claims lost for failure to disclose accident claims that would have been exempt if only the debtors had listed them.  

Best advice here is easy: talk to your lawyers, disclose everything, and you will have the best chance of success. 

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