Personal Injury Claims in Bankruptcy

If you have a potential personal injury claim and are considering bankruptcy (or have already filed bankruptcy), it is very important to list your personal injury claim as a potential asset in your bankruptcy schedules.  A failure to schedule your personal injury claim as an asset in your bankruptcy could prevent you from pursuing the claim in the future.  Generally, personal injury claims are exempt in bankruptcy so there is no reason to avoid disclosing the claim.  Ironically, many bankruptcy debtors refuse to disclose personal injury claims in bankruptcy in an effort to protect them  end up losing their right to pursue the claim because of their failure to disclose.  

In a Chapter 7 bankruptcy, all assets (including personal injury claims) become property of the bankruptcy estate.  The bankruptcy Trustee is charged with the duty of liquidating any unprotected assets including potential claims the debtor may have. However, in Colorado, personal injury claims are protected from creditors and bankruptcy Trustees will generally allow the debtor to pursue personal injury claims for their own benefit.  If you have a personally injury claim and are considering filing for bankruptcy protection, it is important to speak with an experienced bankruptcy and personal injury attorney to ensure that your claim is properly protected. 

In a Chapter 13 bankruptcy, a personal injury claim should be disclosed even if it arises after the filing of your case.  While the personal injury claim is protected from creditors, personal injury funds could be considered a change in circumstances that could affect your Chapter 13 Plan payment.  Again, it is important to consult with an experienced bankruptcy and personal injury attorney to ensure your claim is protected.