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

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.

My settlement was for pain and suffering.

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Attorney answers 12


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 based on general legal principles. You become a client when you enter into a formal retainer agreement with me.


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 California bankruptcy matters, the information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with a bankruptcy attorney. It is important to have a consultation with a bankruptcy attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.


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.


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 (310) 590-4575. This answer is made available by the lawyer for educational purposes only. By using or participating in this site you understand that there is no attorney client privilege between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed professional attorney with whom you have established an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question.


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.


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


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.


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 intended to form an attorney client relationship. Manuel Juarez. Esq., is licensed only in California. He practices in Antioch, Berkeley, Concord, Oakland, Hayward, Martinez, Newark, Richmond, San Francisco and San Rafael. This information is good only in California and it is not to be taken as legal advice on car accidents, personal injury, divorce, bankruptcy or in any other type of situation. Esta respuesta es del Abogado de Accidentes de Autos, Abogado de Lesiones Personales, Abogado de Heridos en Accidentes de carros, Manuel A. Juárez, Abogado Hispano de Accidentes, Abogado de Divorcios, Abogado Latino de Accidentes, Abogado de Accidentes de Oakland, Hayward, San Francisco, California. Estas respuesta son solo para información general y no consisten en consejo legal sobre divorcios, mantención de esposas, mantención de hijos o bancarrotas. Las respuestas son comentarios legales que no forman una relación de abogado y cliente. Manuel Juarez, Esq., esta licenciado solo en el Estado de California. El abogado de lesiones y heridos en accidentes de autos, Manuel A. Juarez es licenciado solo en California.


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


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 your area before acting on anything you read on the internet.


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!


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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