How Does Bankruptcy Affect My Injury Claim – MN Lawyer?
Our Minnesota personal injury lawyers represent people injured in accidents in Minnesota. We do not handle bankruptcy cases. In fact, there are other attorneys who specialize in that. However, occasionally, our accident injury cases intersect bankruptcy law. The person we are suing may file for bankruptcy, or our own client has to file for bankruptcy. Here is a blog article from our personal injury attorneys regarding what happens if the person who injured you declares bankruptcy in MN.
The bankruptcy of a person or business who caused an accident can be because of their liability for that case. In most cases, however, it is usually because of financial problems that were going on before the accident. Fortunately, in most of our cases, there is insurance coverage that still pays even though the person or business that injured you filed for bankruptcy.
If you are injured in an accident while you are going through bankruptcy, or if you file for bankruptcy after your accident, you should be aware of how the bankruptcy laws affect your case. This is something you should discuss in detail with your bankruptcy lawyer. In the meantime, our top personal injury lawyers in Minnesota can provide some basic information to get you started.
The Bankruptcy Code permits a debtor in MN to make a choice between the Federal exemption system and the State’s exemption system. 11 U.S.C. §522(b)(3). The “exemptions” discussed are the things that you can keep after bankruptcy, that don’t get taken to pay your creditors.
BANKRUPTCY EXEMPTIONS
Minnesota’s exemption system allows an exemption for rights of action for injuries. This applies to the person of the debtor or of a relative whether or not resulting in death. MS §550.37(22). This is not subject to attachment, garnishment or sale on any final process issued from any court. Id. To qualify under this section, the claim or right of action must flow from an actual physical bodily injury, not simply pain and suffering or defamation. 208 B.R. 690, 208 B.R 924.
Further, rights of action refers only to disputed pending or future claims. Once the settlement is made, the proceeds, including structured settlement payments, are subject to attachment. 40 B.R. 746, 95 F.3d 703, MIDLAND V ELDRIDGE (2011). Subd. 22 of this section would be broadly construed to include any damages suffered and sought to be compensated as part of a personal injury case by the debtor or debtor’s relative. Therefore, a debtors’ claims for permanent disability, pain and suffering compensation, past or future medical losses, loss of past or future income or other economic loss, and loss of consortium could all be claimed as exempt. 40 B.R. 746.
The Federal exemption system contains an exemption for payments on account of personal bodily injury not to exceed $20,200. 11 U.S.C. §522(d)(11)(d). There is also an exemption for payment on account of the wrongful death of an individual of whom the debtor was a dependent. Although, this is limited to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. 11 U.S.C. §522(d)(11)(B).
BANKRUPTCY RULES FOR PERSONAL INJURY CASE
Also, compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent can be exempt. Again, however, only to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. §522(d)(11)(E). The debtor must list the personal injury claim with the trustee and claim the exemption, or the debtor could be estopped from pursuing the personal injury claim. However, the Minnesota Constitution provides that a debtor may exempt only a reasonable amount of property from garnishment or attachment. 477 N.W.2d 703, ESTATE OF EMLYN JONES V KVAMME (1995).
When the client of a personal injury lawyer MN files for bankruptcy, it definitely complicates the claim. But it does not necessarily stop or ruin the claim. You just need to plan appropriately. Tell your MN accident injury attorney as soon as possible about the situation, so we can get a bankruptcy attorney involved. Together, we will help you make the right decisions for your case.
ACCIDENT INJURY LAWYERS MN
Pam Rochlin and David Rochlin are experienced personal injury lawyers in MN with more than 25 years’ experience. We have successfully handled hundreds of injury cases. Pam Rochlin is a former partner at Meshbesher and Spence, offering small firm attention and personal service. The primary focus of our best MN injury lawyers is to make sure you receive fair and complete compensation after you have been injured in an accident. We also want to make sure you get to keep as much of that compensation at possible.
We have offices where you can meet a personal injury lawyer in Minneapolis MN, St. Louis Park and Woodbury. Our attorneys also meet our personal injury clients at their homes in St. Paul MN, Chanhassen, Chaska, Maple Grove, and Apple Valley. Also, White Bear Lake, Brooklyn Park, and other cities throughout Minnesota. We handle car accident cases, dog bites, and more. Call us for a free consultation.