What happens to a personal injury settlement in a bankruptcy?

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What happens to a personal injury settlement in a bankruptcy?

In 03/08, I fell at a private residence and fractured my left ankle, requiring urgent surgery. The fracture didn’t heal and required a second surgery in 11/09(I was a RN at the time of the injury yet wasn’t employed at the time; the ankle wasn’t “healed” until 02/10.) During this long recovery time, we lost our home and paid thousands in medical expenses. Our bankruptcy attorney advised us the day before meeting the the trustee that we would probably need to retain a PI attorney, which we did. In OR, are we able to keep 10k? What about pain and suffering?

Asked on August 14, 2010 under Bankruptcy Law, Oregon

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You don't indicate what type of bankruptcy that you have filed. In a Chapter 7, the Trustee determines whether there are any non-exempt assets which could be seized and liquidated for the benefit of your creditors. In some jurisdictions personal injury settlements are protected from seizure in a Chapter 7; in others they are not. In a Chapter 13, some jurisdictions treat such an award as a form of disposable income you must submit to the Trustee. Right now, you should ask your bankruptcy attorney what your rights/liabilities are in your specific jurisdiction.


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