I received a personal injury settlement and am considering filing for bankruptcy because my debts are just too high.

Asked 7 months ago - San Diego, CA

In California, if I file for Chapter 7 or Chapter 13 would my creditors be entitled to money from a personal injury settlement? My settlement is not taxable but I do not need the money for ongoing treatment due to my injury. How would this work? Thank you in advance.

Additional information

My settlement was for pain and suffering.

Attorney answers (12)

  1. Shaye Larkin

    Contributor Level 20

    31

    Lawyers agree

    Answered . I agree with Stuart. There are personal injury exemptions that can be used, but a full analysis of your situation needs to be made to determine what amounts can be protected and whether it is better for you to file a Chapter 7 or a Chapter 13 bankruptcy. Such analysis is beyond the scope of this forum.

    While I would love to be your attorney and you may call my office any time to schedule a FREE consultation on... more
  2. Stuart Gregory Steingraber

    Contributor Level 17

    27

    Lawyers agree

    Answered . Personal injury proceeds may be fully or partially exempted. More information is needed to give you useful advice.

    You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is... more
  3. Michael Salanick

    Pro

    Contributor Level 14

    27

    Lawyers agree

    Answered . Personal injury settlements may be exempt assets DEPENDING on a variety of factors related to your actual, specific scenario.

    Please Note: bankruptcy cases requiring any degree of exemption planning, however, are not the DIY (do it yourself) variety. Seek experienced bankruptcy counsel to represent you throughout the duration of your case, including the critical planning phase involved in completing your bankruptcy petition and schedules.

    NOTE: we can be reached at www.salanicklaw.com (310) 590-4575. This answer is made available by the lawyer for... more
  4. Jason Todd Studinski

    Contributor Level 20

    24

    Lawyers agree

    Answered . Consult with a good bankruptcy lawyer to handle this for you. Bankruptcy is not necessarily a user friendly process and a good lawyer can help protect your assets. Good luck.

  5. Christopher John Gansen

    Pro

    Contributor Level 18

    22

    Lawyers agree

    Answered . Could be exempt, but a BK lawyer will know best.

  6. Manuel Alzamora Juarez

    Pro

    Contributor Level 20

    21

    Lawyers agree

    Answered . Please consult a BK attorney. Best of luck.

    This answer is provided by California Auto Accident Attorney Manuel A. Juarez, Esq., These answers are not... more
  7. Christian K. Lassen II

    Pro

    Contributor Level 20

    21

    Lawyers agree

    Answered . Your finances need to be evaluated in full by a local bankruptcy attorney so a game plan can be formulated.

  8. C. Donald Briggs III

    Pro

    Contributor Level 20

    20

    Lawyers agree

    Answered . More facts would be needed to answer this question. You need to consult with an experienced bankruptcy lawyer who can evaluate this for you. There are certain exemptions for recoveries in personal injury cases. Have your lawyer advise you and give you your best options.

  9. Richard D. Granvold

    Pro

    Contributor Level 18

    18

    Lawyers agree

    Answered . YOu might want to add how much you received and is still on hand to assist in the answers to your questions as well as do you own any real estate at all? Still all your assets may need to be known to fully answer and an attorney can easily answer when all your assets are entered into their computer..they can then determine how much or all of the availability for exempting of your asset! good luck.

  10. Brent J Jensen

    Contributor Level 13

    14

    Lawyers agree

    Answered . This question can be answered only by a bankruptcy attorney in your area who is fully familiar with the facts of your case. Before you file, please consult with such an attorney and tell them all the facts. Normally, settlements are exempt to the extent they are compensatory, but these are fact intensive matters, so speak with an attorney quickly.

    This is not legal advice and I am not your attorney until you retain my office. Always consult with an attorney in... more
  11. Justin D Kelly

    Contributor Level 7

    8

    Lawyers agree

    Answered . As the other attorneys have stated, you REALLY need to have an experienced bankruptcy attorney review all the factors (particularly exemptions) before that question can be answered.

    Best of luck!

  12. Gary D. Bollinger

    Pro

    Contributor Level 19

    6

    Lawyers agree

    Answered . Don't make any payment to medical providers until you consult a bankruptcy attorney.
    In fact, except for routine utilities and other routine bills, don't spend this money until you consult a bankruptcy attorney to avoid a preference issue.*

    *The bankruptcy attorney can explain.

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