After being involved in a car accident, many people find themselves in financial distress on top of the emotional, mental, and physical repercussions of their accident. How can you address these issues while also moving forward with your life?
It may be the right time to consider filing bankruptcy after a car accident if your situation’s financial burden is too much, but you want to be sure you know what you are getting into first. Learning more about bankruptcy options such as Chapter 7 filing and how they may or may not help your situation is key to moving forward with security and confidence.
After The Accident: How To Handle Debts
After being involved in an accident that leads to material loss, medical debts, and other unexpected bills, many find that they are having difficulty making ends meet. When you are not at fault, it is possible to recover some money through a personal injury claim for what you have gone through.
Experienced personal injury lawyers will know how to make a strong case for personal injury claims after a car accident. Depending on the proceedings, the settlement may be enough to cover the debts you face after an accident without the need for bankruptcy.
Personal injury lawyers state that they should be able to give you a consultation and a good idea of what to expect in terms of a settlement. Of course, it’s impossible to predict the outcome of a personal injury case until the case actually happens.
When It’s Time For Bankruptcy
Sometimes, however, the settlement still won’t be enough, or you cannot file a personal injury claim due to the accident’s circumstances. If the accident was a hit-and-run or the other driver did not have insurance coverage, there may be no one to hold responsible for these debts.
In these cases, Shuman Legal states that it might be time to consider a Chapter 7 bankruptcy filing instead. This type of bankruptcy creates a way for accident victims to discharge the related debt in just a few months. Chapter 13 bankruptcy, in which the debts are repaid through a structured payment plan, may also be an option in extreme cases.
It’s important to remember that bankruptcy can be a complicated task, and the rules vary from state to state. Learn more about the limitations in your area from an experienced attorney before proceeding.
Reporting Any Settlements
It’s important to understand how personal injury case settlements and bankruptcy filings can interact and what you need to do to keep things by the book.
Filing for bankruptcy places all of your belongings into what is known as your bankruptcy estate. This estate includes funds that you are entitled to, such as possible settlements through personal injury cases. If you win a case or win a case down the line, settlement funds will be considered part of your bankruptcy estate.
This means that the bankruptcy trustee would have a say in the personal injury claim proceedings and any settlement terms proposed. They would have the power to make decisions about the case, whether it should be filed, and if a settlement is acceptable to the creditors involved.
While talking with a personal injury lawyer, be sure to discuss the possibility of a bankruptcy filing and what would happen if you were to file. They will have experiences to share, and they may even be able to recommend a bankruptcy lawyer to assist with your filing.
At-Fault Accident Debt
Filing for bankruptcy is possible even if you were found to be at fault for the accident in question. Many debts incurred through an accident you were responsible for can be eliminated through bankruptcy.
Whether the debts are related to personal injury or property damage, they can still be released through a bankruptcy filing. In particular, credit card debt and medical bill debt are both dischargeable through Chapter 7 bankruptcy.
There are, however, limitations to what types of debt can be discharged through a bankruptcy filing. Drivers found at fault for a malicious injury accident or drunk driving will not be able to get rid of this debt through a Chapter 7 filing. Instead, you’ll have to look at Chapter 13 bankruptcy, which requires repayment over a 3-5 year period instead of debt elimination.
Regardless of how you decide to move forward as you work on settling debts related to your accident, it’s essential to be informed of the related legal policies. Filing for bankruptcy after a car accident is challenging, and it’s not a situation that you want to go through alone.
Make sure that you work with the appropriate legal teams as you consider bankruptcy, personal injury claims, and other settlements to get your future back on track. You have the power to regain control of your finances, get out of debt, and move towards getting your next vehicle. Don’t forget it!