How Does Bankruptcy Affect My Injury Claim – MN Lawyer?
Our Minnesota personal injury lawyers represent people who have been injured in accidents in Minnesota. We do not handle bankruptcy cases, and there are other attorneys who specialize in that. However, occasionally, our accident injury cases intersect bankruptcy law, either because the person we are suing declares bankruptcy, or because 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.
If you are injured in an accident while you are going through bankruptcy, or if you have to 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, but our top personal injury lawyer in MN can also provide some basic information that you can bring to your bankruptcy specialist.
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).
Minnesota’s exemption system allows an exemption for rights of action for injuries 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, and 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 action by debtor or debtor’s relative, so that 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. 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).
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, 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). Also for a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. §522(d)(11)(E). However, 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.
When the client of a personal injury lawyer in 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 that about the situation, so we can get a bankruptcy attorney involved and help you make the right decisions for your case.
Pam Rochlin and David Rochlin are experienced personal injury lawyers in MN with more than 25 years’ experience successfully handling 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 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, Apple Valley, White Bear Lake, Brooklyn Park, and other cities throughout Minnesota. Call us for a free consultation.