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How long after recieving a large personal injury settlement can a person file bankruptcy?

Sandusky, OH |

I got in an accident last year, someone hit me, I do not have insurance and have accumulated large medical bills. I need to file bankruptcy because I can not pay my bills. My problem is, I do not want to do anything illegal, or that can precieved as fraud. If I continue to find ways to pay my bills and recieve a large settlement do I have to spend it on my bills or can I wait a certain amount of time and then file bankruptcy? The reason I ask is because I still do not have health insurance and I have still medical issues that I will need to pay for, so I do not want to have to give all my money away and not be able to provide care for myself.

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Attorney answers 4


Exemptions for money/proceeds are set by bankruptcy law under Title 11 and may include some state exemptions.

“Time lapsed” is not an affirmative defense to the bankruptcy Trustee’s right to compel turnover of assets not protected by exemptions.

You need a bankruptcy attorney who knows the jurisdictional amount of exemptions applicable upon your filing of bankruptcy.


I am licensed in Nevada, but this answer should apply in Ohio as well.

First, you need to talk to your personal injury attorney about this if you have one and seek counsel from a Bankruptcy attorney to help you decide how to proceed.

If you file bankruptcy, your claim against the other driver (or the insurance company) becomes property of the bankruptcy Estate. Depending on the law in Ohio, you may be able to keep some of the funds from the Settlement. In Nevada, some may be kept, but the last I checked, the amount that could be kept was less than $20,000.00. If you have bills from the accident, the medical providers may be willing to take liens against the proceeds of the case and wait for payment.

Hope this helps.

/s Donald Kudler

This answer does not create an attorney client relationship and does not constitute legal advice, but is solely the opinion of a Nevada Attorney.


First off it really depends on what large means. Most states allow an exemption for a personal injury claim like Illinois does. You should speak with your personal injury lawyer to see what he or she expects the claim to be settled for. A bankruptcy attorney in your area can tell you how much of the personal injury award can be protected if any based upon your state exemptions. You should speak with an experienced bankruptcy attorney after you speak with your personal injury attorney and see what they say. Hope this helps

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.


The question raised in your caption is the wrong thing to ask. You can file bankruptcy immediately after (or even before) you receive a personal injury settlement. Your underlying question seems to be "how can you retain the proceeds" and still file bankruptcy.

The answer is to convert the proceeds into exempt assets. Property that is exempt varies widely from state to state, and I would urge you to meet with a bankruptcy lawyer in your community for specific advice on what is exempt and how to implement this process without stepping over the fraud line.

Hope this perspective helps!