personal injury and bankruptcy?
I got a personal injury settlement, but rather then paying the medical bills with it (since it was so low) can i keep the money and file bankruptcy on the medical bills, since i already have to file anyway? Is this legal?
Im in ohio im aloud to keep 20,000 of a personal injury lawsuit i got just under 20,000. My question is can my lawyer take his 30% and give me my part and rather then pay the medical bills can I file bankruptcy on them along with everything else im already going to file on.
It sounds unethnical and immoral to me but I am just wondering what the laws are I have no intentions on committing any crimes. I just know that they said in ohio if you file bankruptcy you can keep $20,000 of any personal injury settlement or judgment so I wasn’t sure if doing this was legal or not.
When you file for bankruptcy, you create something called an “estate”. Everything you own up until the point of filing, whether legal or equitable, belongs to that “estate”. There is usually a trustee appointed to handle the estate on behalf of the Court.
In a typical Chapter 7 case, everything you own up to filing can be sold to satisfy your creditors. However, there are state and federal exemptions. You say you live in Ohio and you’re allowed to keep $20,000.00 of personal injury funds. If Ohio opted out of the federal exemption scheme, then you would report the settlement in your statement of financial affairs and your Schedule B, and in Schedule C claim it as 100 percent exempt.
If the trustee doesn’t object to the exemption, if the creditors don’t object to the exemption, after a specified period of time its yours.
The trustee can also abandon those proceeds.
If there’s an objection the court decides.
Just make sure that you hire a reputable bankruptcy lawyer, and that you give a detailed account of your property to the lawyer and that your papers are properly prepared.
EDITED TO ADD: See the Ohio Bar’s explanation of recent changes to Ohio’s exemption law:
http://www.ohiobar.org/Pages/LawYouCanUseDetail.aspx?itemID=566
And this one discusses the issue directly:
http://www.blakebrewerlaw.com/ohio_bankruptcy_exemptions.html
Toledo Ohio personal injury attorney Mike Bruno